A senior parliamentary aide to David Cameron has resigned over "unacceptable" expenses claims, the Conservative party said on Thursday.
Andrew Mackay, MP, Cameron's senior parliamentary and political adviser, quit after voluntarily submitting his claims to party officials.
"That examination of Mr Mackay's past allowances revealed an unacceptable situation that would not stand up to reasonable public scrutiny," a party spokesman said.
"Although Mr Mackay maintains that those arrangements were agreed by the (House of Commons) Fees Office, he resigned this morning with immediate effect."
Bracknell MP Mackay is the first casualty of a week-long furore over expenses that has gripped parliament since the Daily Telegraph began publishing leaked details of politicians' claims for the cost of their second homes.
The revelations have put parliament in a spin, with MPs lining up to apologise and repay claims for furniture, gardening and maintenance now seen as inappropriate.
Mackay had claimed for mortgage interest payments on a London property jointly owned with his wife Julie Kirkbride MP, although she was already claiming for her constituency home in Bromsgrove, a source said.
Although the arrangement had been approved by parliamentary officials, the party had deemed it was no longer acceptable.
The source added the party had no problem with Kirkbride's arrangements.
Mackay had earlier told his local paper he had "nothing to fear" over his expenses. He will now go before a party scrutiny panel which will decide how much money he must repay.
His resignation came after former Labour minister Elliot Morley apologised after claiming more than 16,000 pounds for a mortgage that was already paid off.
The admission by one-time agriculture minister Morley threatened to overshadow Prime Minster Gordon Brown's launch of Labour's local and European elections campaign later on Thursday.
Brown was "very concerned" at Morley's behaviour and was due to discuss the case with Labour's chief whip, in charge of party discipline, an aide told Reuters.
Morley had continued to claim mortgage interest payments on his constituency home for more than 18 months after the loan was repaid, the Daily Telegraph reported.
"I have made a mistake, I apologise for that and I take full responsibility," Morley said, adding that he had now repaid the money.
Labour and its Conservative and Liberal Democrat opponents have all been embarrassed by the leaked claims, which were due to be officially published in redacted form in the summer.
Brown is due to launch Labour's campaign in Derbyshire with his party trailing badly in opinion polls, well behind the Conservatives who would easily win a general election due by next June if they maintain their lead.