David Cameron is to expel one of his MEPs after an official inquiry found him guilty of expenses abuses and ordered him to repay more than £500,000.

Den Dover, a former Conservative chief whip in the European Parliament, faces a criminal investigation over payments to a family company.

The MEP for North West England had the Conservative whip withdrawn yesterday when Mr Cameron learnt the results of the inquiry conducted by the European Parliament.

It found that Mr Dover had a conflict of interest in using M P Holdings as a “service provider” for secretarial and parliamentary assistant work. He had declared “no financial interest” in the family-owned company that employs his wife, Kathleen, as secretary and daughter, Amanda, as part-time parliamentary assistant. His wife and daughter are also company directors.

Harald Romer, the Parliament's secretary-general, also informed Mr Dover that the expenses investigation had found that there was “unaccountable expenditure” of more than £500,000.

Mr Dover paid £758,146 over seven years in allowances to the company run by his wife and daughter. The company is understood to have bought two BMWs and paid for repairs on two houses used by the Dovers, as well as making a donation to the Conservative Party last year of £1,200.

Mr Cameron promised a “deep clean” of MEP expenses after the disclosures about Mr Dover and Giles Chichester, the former Tory leader in Europe, who was forced to quit by Mr Cameron in June for breaking the rules by paying £445,000 in expenses over the past 12 years to a company of which he was a paid director.

Mr Dover was unavailable for comment last night. He said in June that his wife and daughter “get market rates but they put in two or three times the number of hours. They just never stop, it is a 24-hours-a-day job.”

Mr Cameron ordered a tougher transparency regime for MEPs, to which all those who wish to stand again in next June's elections have had to sign up. It will involve the publication every six months, starting in January, of details of how they spend their allowances as well as the names of any family members they employ and their salary band.

MEPs can claim up to £160,054 annually for staff, £38,340 for office costs and £82,490 for subsistence and accommodation. There is, however, no detailed auditing of how the money is spent.

Questions over Conservative MEPs using allowances to employ relatives through family companies - which is legal under Brussels rules - first surfaced this year. Mr Chichester was cleared of any wrongdoing but Mr Dover's file has been passed to Olaf, the European anti-fraud body.

MEPs are banned from being paid directors of the company that handles their expenses, but Mr Chichester, 62, satisfied officials that he did not benefit financially from the arrangement.

Times Recommends

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