This is a very serious allegation which needs to be investigated quickly and in depth by the parliamentary commissioner for standards

Norman Baker MP

The newspaper set out how the Conservative leadership frontrunner had taken money from British and American firms in return for private briefings and speeches.

The money went to the local Conservative association in his former Enfield Southgate seat.

The shadow chancellor has not disputed receiving the payments but rejected the accusation that he had behaved improperly by not entering them into the House of Commons register of members' interests..

"I think this whole thing is a smear by what is after all a Labour supporting paper," he said.

But the Guardian alleges that Mr Portillo knew when he agreed to host private dinners that his constituency would benefit from cash payments of at least �2,000 a time.

The allegations came at a critical time for Mr Portillo, just hours ahead of the Tuesday's opening knock-out ballot of the Tory leadership contest.

Norman Baker has written to Elizabeth Filkin

The former defence secretary secured 49 out of 166 votes in the ballot of Tory MPs, coming 10 votes ahead of his nearest rival.

Mr Baker urged a swift investigation by Ms Filkin.

He said: "This is a very serious allegation which needs to be investigated quickly and in depth by the parliamentary commissioner for standards."

Filkin decides

Ms Filkin will now have to decide whether there are grounds for an investigation.

Mr Portillo said: "I, like most Conservative members of parliament, have raised money for my party and for my Conservative association and I have done nothing improper.

"Under the rules of the House and under the rules governing ministerial conduct nothing I did needed to be declared.

He went on: "The rules of the House said that money that went to the association did not need to be declared unless it was regular payments in support of a candidacy or whether the MP had been the intermediary, and none of these things applied.

'No obligation'

"And there was no sense in which any obligation is created between me and any of these people."

He suggested that the timing of the allegations was "an attempt to influence the outcome of the leadership election of the Conservative Party".

"But it presents me with no anxiety because I have done everything according to the rules. There has been no impropriety."