Nadhim Zahawi should not have to step aside as Conservative Party chairman while an ethics investigation into his tax affairs takes place, according to a minister.
It comes after a senior Tory MP broke ranks to call for Mr Zahawi to “temporarily recuse himself” from his party and Cabinet role until a probe into his conduct is over.
Caroline Nokes, chairwoman of the Commons Women and Equalities Committee, told BBC Breakfast Mr Zahawi should “stand aside until this matter is all cleared up”.
Home Office minister Chris Philp said Mr Zahawi should be treated as “innocent until proven guilty” and it is “reasonable” for him to continue as party chairman.
Mr Zahawi is subject to an inquiry by the new independent adviser on ministers’ interests, Sir Laurie Magnus, into declarations about his tax affairs.
He resolved a multimillion-pound tax dispute with HMRC by paying a penalty — reportedly around 30% of a £5 million settlement — while serving as chancellor under former prime minister Boris Johnson.
After Mr Sunak entered Downing Street in October, he appointed Mr Zahawi Conservative Party chairman and minister without portfolio, allowing him to attend Cabinet.
Policing minister Mr Philp said it is his understanding that Mr Sunak was told there were “no outstanding issues” in relation to Mr Zahawi’s tax affairs when appointing him to the roles in the autumn.
Mr Philp, asked on BBC Breakfast about Ms Nokes’s call for Mr Zahawi to step aside during the investigation, said: “I don’t take that view.”
“The investigation has been launched by the Prime Minister; that is the right thing to do.
“It will get to the bottom of this and then the Prime Minister will make his decision.
“But I don’t think it is fair to jump to any conclusions before the investigation has concluded.”
Sir Laurie is expected to focus on Mr Zahawi’s ministerial declarations as part of his first probe since being appointed.
But the investigation could extend to his prior tax arrangement and whether he lied to the media.
Mr Philp said it will be for the ethics tsar to find out “the facts” behind what amounts to “carelessness” on Mr Zahawi’s part when it came to reporting his financial affairs to HMRC.
He told BBC Radio 4’s Today programme: “I don’t know what form that carelessness took and nor probably does anybody else apart from HMRC and Mr Zahawi, so let’s find out the facts.”
“We haven’t set a timeline for it because whilst we want this to be conducted swiftly, it’s important equally that it is thorough,” the prime minister’s official spokesman said.
Labour said Mr Zahawi’s admitted carelessness should see him removed from Government.
Shadow foreign secretary David Lammy told Sky News: “When you’ve been chancellor of the exchequer and you said you’ve been careless despite the fact that offshore trusts have been set up in Gibraltar, I’m sorry, you really ought to resign or be sacked.”
Mr Zahawi, in a statement on Monday, said he is “confident” he has “acted properly throughout”.
His tax affairs formed one of two controversies Mr Sunak has been forced to confront this week, with questions also being raised over the decision to appoint Richard Sharp BBC chairman while he reportedly helped former No 10 incumbent Mr Johnson secure a loan of up to £800,000.
Mr Sunak distanced himself from the allegation, saying the chairman’s appointment was made by “one of my predecessors”.
William Shawcross, the commissioner for public appointments — and also father of Eleanor Shawcross, head of No 10’s policy unit — said he would review the way competition for the post was run to ensure it was in compliance with Whitehall rules.
Mr Sharp has insisted he was “not involved in making a loan or arranging a guarantee” for the then-prime minister.
He told BBC staff members his role was merely to “seek an introduction” for Sam Blyth, who reportedly acted as guarantor for a loan to Mr Johnson, “to the relevant official in Government”.