In a statement issued on Friday he hit out at the Daily Telegraph, which first broke the story as part of its campaign exposing abuses of the parliamentary expenses system by UK politicians.

Binley, however, insists he has been unfairly targeted. “For the record, the Telegraph implied that I had broken the rules by renting a flat in London that was bought by a company I founded, and ran, before becoming an MP, and that, essentially, I was paying rent to myself. Bunkum,” he said.

“My company did buy a property near Westminster, but it was a commercial decision agreed to by the board of directors. It was the property of BCC Marketing, and it was perfectly correct that I pay rent. And let me make two points here: if I didn’t pay rent to BCC Marketing, I would have had to pay rent to another landlord and the rent I paid was all-inclusive (council tax, utility bills and so on) and cheaper than I would have paid for similar accommodation I might have rented privately.”

Binley claims that the company was “about £38,000 down on the deal over the three-year period”. He added: “So much for implying that I had diverted taxpayers’ money for my own personal benefit.”

Although Binley’s rental arrangement was in keeping with parliamentary regulations when it was agreed in February 2006, changes to the rules two months later barred MPs from paying rent to their own companies. Binley appealed against the decision – but the appeal was only rejected earlier this year.

“All in all,” he said, “it is a non-story”. Binley founded BCC Marketing Services in 1988. The company offers a range of telemarketing and market research interviewing services. He remains chairman of the business and is a 20% shareholder, as is his wife Jacqueline.

Binley was elected MP for Northampton South in May 2005.