Senior Tory Stephen Dorrell is facing a formal sleaze investigation over failing to declare his financial links to care home owners.

It emerged last month that the Health Select Committee chairman had sold his London home property to friends at a reported £70,000 profit, and was using Commons expenses to rent it back from them.

Mr Dorrell was accused of a conflict of interest because his new landlords run a chain of care homes, and his committee has been carrying out an inquiry into social care.

A spokeswoman for parliamentary standards commissioner John Lyon said he was investigating whether the Charnwood MP breached rules on declaration of interests.