Police called in as fresh expenses leaks embarrass MPs

The parliamentary authorities reacted to damaging revelations of cabinet and junior ministers cynically exploiting Commons expenses rules by calling in the police to investigate how the details were leaked and by whom.

The involvement of the police, and the prospect of a full-scale criminal inquiry, came as fresh disclosures emerged of expenses claims made by middle-ranking ministers for items as trivial as a razor and a kettle.

One MP implicated in the latest allegations told the Guardian that he believed a mole was still active operating inside parliament and feeding material to the Daily Telegraph. Others said the paper was guilty of trading in stolen property, and could be subject of a swingeing court fine running into millions.

Sir Stuart Bell, a member of the Commons estimates committee, claimed that there had been a breach of the Data Protection Act.

Downing Street believes the police investigation may backfire because of the huge public anger at what is seen as greed and fraud by MPs.

Tonight it emerged that the employment minister, Tony McNulty, could face a police investigation after a complaint was made about expenses he had been claiming under the second homes allowance. In March, it emerged that McNulty had claimed about £60,000 from Commons allowances since 2002, towards maintaining a house where his parents lived.

The Daily Telegraph is expected to continue revealing fresh detailstomorrow, this time focusing on a clutch of middle-ranking ministers, including the Home Office minister Phil Woolas, and the health ministers Phil Hope and Ben Bradshaw.

Hope said he had made a mistake in wrongly claiming for a razor. "In order to represent my constituents effectively I have somewhere to live - in my family home - near Corby and I have somewhere to live in London to carry out my duties in parliament, for which these costs have been incurred."

He added: "In all my claims for the costs of the accommodation in London I have acted with the full approval of the fees office and the claims are entirely in line with the rules of parliament. Any new fittings were brought to replace dilapidated or broken fittings in my flat in London, any household items were bought to make the flat usable, I've got a communal garden for recreational use around my flat. I made one claim for a razor. I didn't realise it was inadmissible. It was pointed out and I withdrew it."

Woolas said that the Telegraph had made a mistake in the allegations it had put to him. He said that the paper wrongly assumed that receipts submitted by him were his expenses claim. In fact he regularly submitted full receipts - until asked not to do to by the fees office - and then claimed for far less.

The paper put to Woolas that he had claimed for clothes on behalf of his wife, plus children's nappies and comics. They were on receipts submitted, but not claimed on, by the minister. "I am a victim of too much honesty in putting in the full receipts," he said. Woolas did claim for a kettle in 2006.

Labour MPs believe that a mole may be feeding sensitive personal information to the Daily Telegraph. One MP raised his concerns with the Commons authorities, which helps explain why the police were called in to investigate.

The MP acted after his office raised a series of questions with the fees office about expense claims dating back to 2004. Within an hour of this conversation, the MP's staff were contacted by the Daily Telegraph which then asked questions covering exactly the same area. The MP told the Guardian: "It was uncanny. There is something horrible going on. I have never been so frightened. What is happening is disgusting."

Lord Mandelson, the business secretary, accused the Telegraph of running a dishonest political campaign by focusing on the government and delaying the publication of shadow cabinet expenses claims until Monday.

The Commons members estimates committee will meet on Monday to decide how to respond to the leak and the serious damage being done to the reputation of parliament. It is certain to bring forward publication of the past five years of claims from the planned date in July.

A series of ministers took to the airwaves earlier today to defend their conduct. Gordon Brown, aware of the damage being inflicted on his battered government, insisted he had been trying to reform the expenses rules and admitted that "the system doesn't work."

The allegations against the cabinet ranged from the bizarre to what looked like a systematic attempt to bend the rules for personal gain. They included:

• Gordon Brown, who paid his brother, Andrew, £6,577 over 26 months between 2004 and 2006 for cleaning services at his London flat.

• Jack Straw, the justice secretary, who claimed for the full rate of council tax on his home in his Blackburn constituency, despite receiving a 50% discount from his local authority. Straw discovered the mistake and paid back the money.

• A series of ministers - Hazel Blears, Geoff Hoon and Alistair Darling - changed the status of their London and constituency homes, prompting claims that they were attempting to maximise their claims under the additional costs allowance which is used to subsidise second homes. Blears made claims on three properties in the space of one year.

David Cameron, bracing himself for revelations about his own party, said every MP would have to explain themselves to their constituents. He said: "I completely understand how angry the public are about this and we desperately need change.

"We've got to radically reduce the number of things that MPs can claim for such as barbeques and patio heaters.

The Liberal Democrat leader Nick Clegg said the issue "affects all politicians of all parties and no one comes out of this smelling of roses".

The Speaker, Michael Martin, will make a Commons statement on Monday. It is thought that only 120 MPs have so far examined their "raw" receipts and could go ahead with publication straight away.

The MPs who have still not examined their expenses fully may be given another week before pressing ahead with publication.

The fees office set up a weekend hotline to advise panic-stricken MPs who are worried about how their claims covering the five years back to 2004 will look to their constituents.