Warsi faces quit call over 'sleaze': Tory chairman 'claimed £165 a night while staying with a friend for free'

Dr Wafik Moustafa added that if she had given ‘rent’ money to Mr Khan then he was ‘swindling the baroness’.

In a separate blow, Lady Warsi was forced to admit she had failed to declare rental payments from a London flat she now owns for more than a year.

Labour called for an investigation by the Lords Commissioner for Standards Paul Kernaghan.

The allegations come at a sensitive time for Lady Warsi, who has faced mutterings from senior Tories that she is too much of a political lightweight to make a success of the party chairman’s role. But David Cameron is said to view her as a significant political asset, particularly when the party is desperate to attract more Asian voters.

The claims against Lady Warsi are also a fresh setback for the House of Lords, which has been mired in sleaze allegations in recent years. Tory peers Lord Taylor of Warwick and Lord Hanningfield have both been jailed for falsely claiming accommodation expenses and several Labour peers have been ordered to repay tens of thousands of pounds.

The fresh allegations relate to a six-month period following Lady Warsi’s appointment as a Tory peer in October 2007. Although she made arrangements to buy a new-build flat in Wembley, North-West London, it was not ready to move into until the spring of 2008.

During this period she stayed either in hotels or at the home occupied by Mr Khan when she was in London for Lords business.

But the property’s owner Dr Moustafa said he had never received payments from either Lady Warsi or Mr Khan.

Dr Moustafa, an Egyptian-born GP and former Tory donor, said he had been introduced to Lady Warsi by Mr Khan, a Tory official who he says lived rent-free at his three-storey home in Acton for 15 months.

Dr Moustafa said the Acton property had then become Lady Warsi’s ‘place in London’.

Lady Warsi and Mr Khan last night rejected the claims by Mr Moustafa, who is in dispute with the Tory Party over its refusal to recognise his group, the Conservative Arab Network.

At the time, peers living outside London were allowed to claim £165.50 a night in parliamentary expenses for accommodation in the capital. Official records show Lady Warsi – whose main home is in Dewsbury, West Yorkshire – claimed £12,247 in accommodation expenses during this period.

But Tory sources said she had stayed only two nights a week for six weeks at the Acton address while her new flat was finished.

Lady Warsi, who is on an official trip to the Far East, said she had made ‘an appropriate financial payment equivalent to what I was paying at the time in hotel costs’ to Mr Khan.

Mr Khan backed up his boss, saying: ‘In the early period of 2008, for a short period, Baroness Warsi stayed with me. I can confirm she made a financial payment on each occasion, which compensated for the inconvenience caused and additional costs incurred by me as a result of her being there.’

Labour MP John Mann said: ‘If you are paying no rent where you are staying, you can’t possibly be claiming subsistence for staying there. It all seems very murky. We need a full investigation.’

Labour business spokesman Chuka Umunna also called for an inquiry ‘to rebuild the trust and confidence we need there to be between Westminster and the people it exists to serve’.

In a separate development it emerged that Lady Warsi breached parliamentary rules by failing to declare rental payments from her Wembley flat for more than a year after she moved out. Yesterday she apologised for the ‘oversight’, which she said had now been corrected.

Tory deputy chairman Michael Fallon acknowledged the controversy was ‘embarrassing’ but said Lady Warsi believed she acted within the ‘spirit and letter’ of the rules.

'I put a roof over her head and fed her. She's stabbed me in the back'

The doctor who allowed Baroness Warsi to stay in his home for free told yesterday how he felt ‘stabbed in the back’ by the peer.

Dr Wafik Moustafa, 63, said he treated the Tory chairman as a member of his own family in allowing her to stay in his £1.1million home.

Despite his kindness to her, their friendship has since ‘evaporated’ and they are no longer on good terms, he told the Daily Mail yesterday.

And Dr Moustafa claimed his guest ‘disapproved’ of him having bottles of spirits in the house and had said she would smash them – although she did not carry out the threat.

The GP said he made an informal offer to let the baroness stay after meeting her at a Tory Party event in 2006. He said that she spent nights rent-free in a room at the six-bedroom property in Acton, West London, on and off for four months when she attended the House of Lords in 2007.

Dr Moustafa said as well as letting her off rent he took her out for dinners at her favourite Iranian restaurant in Hammersmith.

He said: ‘I put a roof over her head, fed her and took her out for meals, and she has stabbed me in the back.’

He said that he was ‘disappointed’ that she appears to have chosen to make money out of their arrangement. He added: ‘There is quite a bit of arrogance about her.’

A friend of Lady Warsi’s, Naweed Khan, a Conservative Party worker who is now her special adviser, was already living in the house rent-free.

Although Mr Khan was meant to be staying for only a few weeks, he stayed a year and a half and moved out in 2008, Dr Moustafa said.

The doctor added that despite his hospitality the baroness said she did not approve of him drinking or eating non-halal meat in his own house.

He said: ‘She was very anti-wine and anti-halal in other people’s houses. I’m a Muslim but I’m an Egyptian Muslim, we are not as strict.

‘Once she threatened to break all the alcohol bottles in my house. Both her and Naweed were very fundamental.

‘She said I was a good person but if I didn’t drink alcohol I would be a better person. But she would sit with other people who drank alcohol and wouldn’t say a word.’

Asked about Baroness Warsi’s statement that she paid Mr Khan, Dr Moustafa said: ‘It’s for her to explain not me.

‘Naweed described the baroness as his guest but they were both my guests. He didn’t have any authority to receive money as it was not his house. He didn’t even pay for himself. If this is true [he received money], and I don’t believe it is, he was swindling the baroness.’

He added: ‘She never paid me any money and I never asked for any. I let her stay here because I’m a hospitable person. She never contributed to the bills. It’s part of my nature to give. I give more than I take.’

The GP, a Tory activist for 30 years, said he was not sure what to make of Lady Warsi and Mr Khan’s explanation about the expenses, and said: ‘The story just doesn’t add up.

‘I think what people need to know, if it is true, is what form were the payments in, when were they paid and how much?’

The last time the doctor saw the baroness was at the Conservative Party conference last October where they chatted briefly, but he said he has not had any contact with her since.

He said he did not know if she was cheating her expenses but was shocked at the idea. ‘I think if this is the case it is shocking for someone to take advantage of her public position in that manner,’ he said.

Asked what action should be taken, he said: ‘It is up to the party to decide, not me. I trust the party leadership and trust they will take the necessary steps should it be proved to be true.’

He added that he did not think the revelations would tarnish the Tories’ image, saying: ‘The damage to the party would be higher if people with questionable integrity were left untouched.’