The furore surrounding the disgraced MP Derek Conway deepened last night as it emerged that one of his son’s close friends was also on his payroll.

The Tory MP announced yesterday that he would resign at the next election after he was exposed for paying his two sons out of his parliamentary allowance.

It was disclosed last night that Michel Pratte, a close friend of Mr Conway’s son Henry, is being paid £11,500.08 as a research assistant.

The 23-year-old Canadian is studying for a postgraduate degree at the London School of Economics but works 17.5 hours a week for Mr Conway, the Daily Mail said.

While there was no suggestion of wrongdoing on his part, his employment is another twist in the affair which has claimed Mr Conway’s scalp.

Yesterday, the Old Bexley & Sidcup MP salvaged a measure of gratitude from his party after accepting that his misuse of parliamentary allowances had ended his career. However, a police statement confirming that a complaint had been received over his payments to his sons dampened Tory hopes that his decision would draw a line under the affair.

In a statement released by the party, he said: “I have had tremendous support from my local party, my family and friends but have concluded that it is time to step down.

“Though not an original supporter of David Cameron for the leadership of my party, I believe that he has shown he has both the ability and the character to be Prime Minister of our country and I do not wish my personal circumstances to be a distraction in any way from the real issues that have to be addressed.”

In light of the scandal, the Conservatives are reportedly considering a ban on the children of MPs being paid from public funds for working for them. The leadership believes spouses should be permitted.

Mr Conway, himself a former whip, concluded yesterday morning that he could not survive the fallout from an inquiry that found that he had “misused” parliamentary funds by paying an annual £11,773 salary, plus bonuses totalling more than £10,000, to his younger son Freddie while he was a full-time student in Newcastle upon Tyne.

The Commons Standards and Privileges Committee found that the arrangement with Freddie was “at the least, an improper use of parliamentary allowances: at worst, it was a serious diversion of public funds.”

The Commons committee said it was “astonished” by the lack of evidence of any work that Mr Conway’s second son had done in return for the £45,000 in salary.

MPs will vote today on its recommendation that Mr Conway should be suspended from the Commons for ten days and required to repay up to £13,161 of the money.

Mr Cameron initially sought to save the MP, insisting on Monday that the “appropriate” punishment had been meted out. By Tuesday the Tory leader was said to have had a chance to have read in full the devastating report on Mr Conway. Faced with public anger and the return of “sleaze” headlines, Mr Cameron chose to suspend Mr Conway.

The Conservative leader knew that the MP would continue to dog him until the issue of his long-term future was settled. Had Mr Conway succeeded in rallying his local party — as well as his allies in the Commons — he might have waged a battle to win back the Tory whip in time to fight the next election.

The anger of his colleagues — many of whom are seeing their own staffing arrangements placed under scrutiny — would have helped to convince him that such a course of action was doomed.

Mr Conway faces a possible police inquiry and fresh sleaze investigations into complaints about payments made to his other son, Henry, who was previously paid £10,000 a year under the same arrangement. Mr Conway’s wife, Colette, is also paid out of his parliamentary allowances.

Scotland Yard confirmed that it had received a letter from Duncan Borrowman, the Liberal Democrat challenger for the MP’s seat, asking officers to examine the possibility of fraud. A spokesman said: “We can confirm that we have received the letter. It will take time to look at the contents.”

Jack Straw, the Justice Secretary, compared the resignation of Peter Hain over his failure to declare £103,000 in donations to his campaign to become Labour deputy leader to the outcry over Mr Conway. He said: “These things happen, they happen to any party, as we saw yesterday in respect of Derek Conway.”

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