Rishi Sunak said he acted decisively in sacking Nadhim Zahawi as he stressed that “integrity is important to me”.
The Prime Minister sacked the Tory party chairman for breaches of the ministerial code in relation to his tax affairs.
Critics of Mr Sunak said he should have acted sooner, while allies of Mr Zahawi complained he had not been given the chance to make his case.
“Integrity is really important to me – all of you guys want to see that Government is run properly, that it is run with integrity and there’s accountability when people don’t behave in the way that they should or if something doesn’t go right, and that’s what we’ve done.”
Mr Sunak sacked Mr Zahawi on Sunday after Sir Laurie Magnus, the independent adviser on ministers’ interests, submitted his critical findings.
The Prime Minister said that on the basis of those facts “I was able to make a very quick decision that it was no longer appropriate for Nadhim Zahawi to continue in Government”.
But Mr Sunak insisted he will take “whatever steps are necessary to restore the integrity back into politics, and you can have confidence that the process works”.
Sir Laurie’s investigation concluded that Mr Zahawi breached the ministerial code by failing to be transparent about the multimillion-pound settlement with HM Revenue & Customs (HMRC) reached while he was chancellor, which included paying a penalty.
Allies of Mr Zahawi claimed that the MP had lost his job after being given only limited time to make his case, with the Telegraph citing claims suggesting he was only given a 30-minute meeting with the independent adviser to defend himself.
He was also reported to have told Sir Tom Scholar, the then-Treasury permanent secretary, about the HMRC investigation and the fine – Sir Tom was sacked when Liz Truss became prime minister.
The Liberal Democrats wrote to Mr Sunak saying he should now strip Mr Zahawi of the Tory whip if he refuses to quit as an MP.
Deputy leader Daisy Cooper said: “Sunak dragged his feet for weeks over this scandal. He must now act swiftly if he’s serious about restoring integrity to this sleaze-ridden Conservative Government.”
Labour chairwoman Anneliese Dodds told the BBC Radio 4 Today programme her party has also written to the PM to ask when he found out about the HMRC investigation into the former Conservative Party chairman, adding that the PM “needed a backbone” and should have sacked Mr Zahawi earlier because “the facts were clear”.
She said: “There are serious questions for Rishi Sunak to answer. What did he know about the investigation into Nadhim Zahawi, the amount of money he had paid in unpaid tax and the penalty he had to pay?
“Why did Rishi Sunak say in Parliament that there weren’t questions to be answered about Mr Zahawi’s tax affairs, and why do we see our Prime Minister continuing to prop up such a rogues’ gallery of ministers?”
Mr Zahawi’s failure to tell officials about the tax investigation “constitute a serious failure to meet the standards set out in the ministerial code”, Sir Laurie said.
The Tory chairman had shown “insufficient regard for the general principles of the Ministerial Code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour”.
Sir Laurie said: “In the appointments process for the governments formed in September 2022 and October 2022, Mr Zahawi failed to disclose relevant information – in this case the nature of the investigation and its outcome in a penalty – at the time of his appointment, including to Cabinet Office officials who support that process.
“Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing Prime Minister.”
Stephen Massey, the party’s chief executive, has stepped in as interim chair until Mr Sunak chooses a successor.
Former Tory leader Lord Hague, Mr Sunak’s predecessor as MP for Richmond, dismissed speculation linking him to the vacancy.
“Since I’ve seen reports of people placing bets on me being the new party chairman, please be aware that I will absolutely not be returning to politics in any shape or form, including that one,” he said.