Bill Cash agreed last night to pay back more than £15,000 claimed for the rent of a London flat owned by his daughter.

The Tory MP rejected calls for him to resign but said that he would hand over the money provided he got a fair hearing from his party’s scrutiny panel, which he expected to do.

David Cameron had ordered Mr Cash to co-operate with the panel or risk being stripped of the whip, saying that the MP faced “serious questions”. Mr Cash agreed to repay the cash after a conversation with the Tory Chief Whip, Patrick McLoughlin.

Speaking earlier to The Times, Mr Cash, 69, had defended his claims by emphasising that, unlike some other MPs, he had not made extravagant claims for his 16th-century manor house in Shropshire. He said that he cut his own wistaria and also pointed out that the flat in Pimlico where he now lived was modest, with “no bath and no bath plug” — an implicit reference to an expenses claim by Jacqui Smith, the Home Secretary, who clawed back 88p for a bath plug.

Mr Cash designated a Notting Hill flat owned by his daughter Laetitia, an aspiring Tory candidate, as his second home for Commons allowances during 2004 and 2005 — even though he owned a home in Pimlico, a short walk from the House of Commons. She later sold the flat for a £48,000 profit. The MP for Stone said that he did not live at his Pimlico flat or rent it out at the time because he had chosen to allow his son Sam to live there rent-free.

He said later that he would not make the same expenses claim today. “In retrospect, if I was asked would I do it now, the answer is ‘I don’t think I would’, but that would be on the matter of judgment.”

Mr Cash is seen as an eccentric figure in Westminster, where he has been an MP for 25 years. Most people when introduced to veteran rock star Sir Mick Jagger, for instance, would be unlikely to choose the subject of the single currency as their opening conversational gambit.

But at a wedding six years ago, accompanied by Laetitia, the MP cornered the singer. Perhaps hoping to recruit a big name to back his Eurosceptic think-tank, he said: “I would like to talk to you about what will happen to Britain’s economy if we were to join the single currency.”

Jagger replied: “I hope you don’t think I’m being rude, but would you just p*** off?”

The anecdote would surprise few in Westminster. Mr Cash, a lawyer, is known as a single-issue politician, obsessed with the impact of Brussels on Britain. His questions in the House have been almost invariably about Europe, he founded the Eurosceptic European Foundation (and got Baroness Thatcher to donate to it) and was a ringleader of a rebellion against the Maastricht treaty that almost brought down John Major.

Ken Clarke once called him the most Eurosceptic MP in Westminster. It is easy to see what it is about England that Mr Cash guards so suspiciously from European influence. He has lived in Upton Cressett Hall, a sumptuous manor house on the site of a deer park and 20 miles from the boundary of his Stone constituency, for the past 40 years.

He and his wife Bridget rent part of the estate to holidaymakers. Lady Thatcher once stayed in the gatehouse, which has its own tower and four-poster bed. According to one former guest, the house has exquisite gardens and vast timbered rooms. The couple were also dubbed generous, kind hosts. Bill (nicknamed “Bonkers Bill” by some of his friends) and his children William, Sam and Laetitia were recalled as being “quite shouty” during debates over dinner.

His children, too, are larger than life. Laetitia met Lady Thatcher when she was 12 and managed to spill her glass of Coca-Cola on the Prime Minister’s sofa. She flat-shared with Jemima Khan and belongs to the Oxford social set.

While she studied fashion journalism, and was offered a job at Vogue (which she turned down) she later went to Oxford, with the child fathered by the Greek shipping heir Alex Goulandris in tow. She is known to be on the A-list of David Cameron’s new parliamentary candidates.

Her brother William used to be a journalist based in Los Angeles where he shared a house with Liz Hurley. Since then he has edited a paper that sponsors the High Net Worth Awards, hosted at Sotheby’s to congratulate the wealthy and their advisers.

Times Recommends

• How I lost the gift of joy for a while
• Why Ann Widdecombe has got it wrong
• Alas, it’s the end of the road for petrolheads