Caroline Spelman, the Tory chairman, is facing a full investigation by the Parliamentary watchdog over allegations that she used her expenses to pay for her nanny.

John Lyon, the Parliamentary Standards Commissioner has been given the go-ahead by the Standards and Privileges committee to investigate, and said the “exceptional” circumstances meant a full inquiry should take place.

A statement from his office said: “Having carefully considered the matter, the Commissioner has recommended to the (Standards and Privileges) Committee that exceptionally he should conduct an inquiry.

“The Committee has accepted that recommendation.”

It emerged earlier this month that the Meriden MP paid Tina Haynes to look after her children and do secretarial work for a “short term period” after her election to Parliament, between 1997 and 1998. It emerged last weekend that Ms Haynes in fact remained on the public payroll for almost two years, from April 1997 to March 1999.

The nanny is also thought to have lived at Ms Spelman’s family home in Kent for some of the time - more than 140 miles from her West Midlands constituency.

Last week The Times revealed that when she stopped paying Ms Haynes from expenses and she ceased to be a constituency aide Ms Spelman's family began to pay her a salary themselves.

The admission suggests that taxpayers' money was being given as remuneration for Ms Haynes's duties as a childcarer and had to be replaced when the public funding stopped.

Mrs Spelman says that she paid Ms Haynes from parliamentary funds for secretarial help and gave her free bed, food and use of a car.

Ms Spelman insists she did nothing wrong in employing Ms Haynes. She says the nanny was doing administrative work at her home - which she was using as her constituency office - as well as providing childcare services outside school hours.

The arrangement was ended after she consulted the then Tory Chief Whip James Arbuthnot - although the party has insisted both sides were convinced she had not broken any rules.

After the story broke, Ms Spelman held a meeting with Mr Lyon on June 9 and asked him to investigate in a bid to clear her name.

The Commissioner’s statement said that after “careful” consideration he had agreed to Ms Spelman’s request, “despite having received no formal complaint about her conduct and that the events complained of were more than seven years ago”.

It went on: “The Commissioner is therefore initiating an inquiry into whether the circumstances of Mrs Spelman’s employment of her secretarial assistant from 1997 breached the rules of the House in force at the time.”

In a statement backing Mrs Spelman's account when the story first broke, Ms Haynes said: "During the period of 1997 to 2002 Mrs Caroline Spelman employed me at her home address, and during the period of 1997 to 1998 I had two roles, one helping Mrs Spelman with childcare and another providing secretarial help to her as an MP.

“My roles and responsibilities were general administration, which entailed tasks such as posting of letters, answering phone calls at the home address, faxing or posting documents to Mrs Spelman whilst she was in London. This was performed during the hours that her children were at school. On Fridays, any help with directions to constituency events was given."

Times Recommends

• Charles blazes trail as sun king
• Thalidomiders win payout 50 years on
• Libel gag on talk of 'medical hurricane'