The Electoral Commission has launched an investigation into funding of works on Boris Johnson’s Downing Street flat.
The spending watchdog said there were “reasonable grounds to suspect that an offence or offences may have occurred”.
The PM has been under growing pressure to declare how refurbishments were paid for after his ex-adviser said there was a plan for donors to “secretly pay”.
Mr Johnson told MPs he covered the revamp “personally” – but would not say who paid the initial bill.
While it is not against the rules to receive donations, politicians must declare them so the public can see who has given them money and whether it has had any influence on their decisions.
The Commission – which regulates party and election finance – has the power to investigate if such funding has been declared properly and can impose fines or pass on allegations to the police if they see fit.
Speaking at Prime Minister’s Questions on Wednesday, Labour’s Sir Keir Starmer pushed the PM to explain who paid for the initial invoice for renovations – giving him “multiple choice” answers between the taxpayer, the Conservative Party, a private donor or Mr Johnson himself.
Sir Keir accused the government of being “mired in sleaze, cronyism and scandal”.
But in the fiery exchange, Mr Johnson replied: “The answer is I have covered the costs… I conformed in full with the code of conduct and officials have kept advising me through this whole thing.
“But I think people will think it is absolutely bizarre that he is focusing on this issue when what people want to know is what plans the government might have on improving the life of people in this country.”
The Electoral Commission has been in contact with the Conservative Party since March over works the PM carried out to No 11.
A spokesman for the watchdog said its newly launched investigation would “determine whether any transactions relating to the works at 11 Downing Street fall within the regime regulated by the Commission and whether such funding was reported as required”.
Boris Johnson did not answer in full the questions about the Downing Street flat, and the very clear question of who initially paid the costs.
During PMQs, he repeated that he covered the costs himself. But the question at the heart of this throughout is who paid to start with, and whether it was a Conservative donor or the party itself.
That’s what’s at the heart of this – and he just wouldn’t answer it.
By the end, I’ve never seen Boris Johnson like that throughout his many, many performances in Parliament. He was visibly really angry.
It was quite something – we haven’t seen that atmosphere when he’s been prime minister at the dispatch box before.
Shortly after the Commission announced its investigation, No 10 confirmed it had appointed a new independent adviser on ministers’ interests.
Crossbench peer Lord Geidt will take up the role that has sat empty for five months after the resignation of Sir Alex Allan in November 2020.
Sir Alex quit after Mr Johnson rejected his finding into Home Secretary Priti Patel, concluding she had broken the ministerial code over bullying allegations.
In its announcement, Downing Street also confirmed Lord Geidt would be carrying out his own inquiry into the funding of the renovations and would then “advise the prime minister on any further registration of interests that may be needed”.
However, the prime minister’s spokesman later confirmed that Mr Johnson “remains the ultimate arbiter” and will decide whether to accept or reject any findings.
Cabinet Secretary Simon Case – the UK’s top civil servant – confirmed earlier this week that Mr Johnson had asked him to review how the refurbishment was paid for.
The PM and his fiancee, Carrie Symonds, carried out works on the flat above No 11 after moving in when Mr Johnson became prime minister in July 2019.
A number of previous prime ministers have chosen to live in that flat rather than the one above No 10 as it is bigger.
The PM receives an annual public grant of £30,000 to carry out renovations to the private residence each year – but reports from newspapers suggested the bill for the latest renovations could be as high as £200,000.
While the government has insisted that Mr Johnson paid for the refurbishments out of his own pocket, his former adviser, Dominic Cummings, wrote a blog last week, claiming the PM once planned to have donors “secretly pay” for the work on his flat.
He described the move as “unethical, foolish, possibly illegal and almost certainly broke the rules on proper disclosure of political donations if conducted in the way he intended”.
No 10 has refused to say whether the prime minister initially received a loan to cover the costs, but Downing Street has insisted the prime minister has “acted in accordance with the appropriate codes of conduct and electoral law”.
Labour leader Sir Keir told the PM the rules were “very clear” and the investigation by the Electoral Commission was “incredibly serious”.
He asked: “Can the prime minister tell the House, does he believe that any rules or laws have been broken in relation to the refurbishment of the prime minister’s flat?”
Mr Johnson replied: “No I don’t. What I believe has been strained to breaking point is the credulity of the public.
“[Sir Keir] has half an hour every week to put serious questions to me… and he goes on and on about wallpaper when I have told him umpteen times now I paid for it.”
A Conservative Party spokesman said: “We believe all reportable donations have been transparently and correctly declared and published by the Electoral Commission.
“We will continue to work constructively with the Electoral Commission on this matter.”
What is the Electoral Commission?
The commission, established in 2001, is an independent body that regulates political finance in the UK, including donations to political parties.
Parties, campaigners, and other groups are required to report donations and loans over a certain amount – which are then published.
The watchdog monitors whether the rules are being followed and has powers to ensure they are enforced.
As well as being able to refer investigations to the police, it can hand out its own sanctions under the Political Parties, Elections and Referendums Act 2000.
They can issue investigation notices, disclosure orders and can carry out interviews – as well as impose fines of up to £20,000, which can increase if payments are late.