David Cameron faced a fresh row over Tory sleaze when the leader of the Conservatives in the European parliament quit his role on Thursday after admitting breaking expenses rules.

Giles Chichester said he had committed a “technical” breach of the rules by channelling thousands of pounds of parliamentary allowances into a family company of which he was a director. He insisted he had acted in good faith, characterising the breach as a “whoops-a-daisy” error.