SHADOW chancellor George Osborne is to be investigated by a sleaze watchdog over his second home allowance claims.

SHADOW chancellor George Osborne is to be investigated by a sleaze watchdog over his second home allowance claims.

Parliamentary Commissioner for Standards John Lyon said he would look into complaints lodged by a Labour activist related to his claims for mortgage interest.

In a letter to Laurie Burton, the chair of the local Labour Party in Mr Osborne's Tatton constituency, he said: "I have accepted your complaint and am inviting his comments."

Mr Lyon said he would look into a claim that "Mr Osborne claimed for mortgage payments that were not necessarily incurred, contrary to the rules of the House".

It is alleged that Mr Osborne took out a mortgage of nearly £5,000 more than the reported price of his house and claimed Commons allowances to cover interest payments on the whole debt, rather than just the cost of buying the house.

The Commissioner said he would not launch an inquiry into Mr Burton's other complaint - that the shadow chancellor had "flipped" his second home and avoided paying capital gains tax.

Meanwhile, Scotland Yard is investigating a Conservative peer who claimed tens of thousands of pounds in overnight allowances despite living just 46 miles from Westminster, it was reported.

Reports identified the peer as frontbench transport spokesman Lord Hanningfield.