Tory Chairman Nadhim Zahawi has been SACKED for a "serious breach" of the ministerial code amid a major row over his tax affairs.
The top minister had come under intense pressure after it emerged that he had settled a multi-million tax dispute - including a penalty - with HMRC while he was Chancellor last summer.
In a letter to Mr Zahawi on Sunday, the Prime Minister said an ethics probe by his independent adviser had made it "clear there has been a serious breach of the ministerial code".
Mr Sunak, who was branded "weak" for failing to sack the Tory Chairman last week, finally said he had made the decision to "remove" Mr Zahawi from the Government.
Last week Mr Sunak attempted to defuse the sleaze row by ordering his ethics advisor Sir Laurie Magnus to launch a probe - only days after he told MPs that the matter had been resolved.
The report by Sir Laurie found that Mr Zahawi hid the fact that he was being investigated by HMRC over his taxes when he became Chancellor in July during the dying days of Boris Johnson's Government.
Sir Laurie said he had not been open about it despite filling in a declaration of interests form that specifically asked about “tax affairs, HMRC investigations and disputes”.
In August, Mr Zahawi agreed to pay a penalty to HMRC when the dispute was settled, but he again failed to declare this.
Sir Laurie said he clearly should have done so as it could “give rise to a conflict… particularly [as he was] the Chancellor of the Exchequer, who has responsibility for the UK tax system”.
Mr Zahawi also failed to declare that he had paid a penalty to HMRC when he was given Cabinet jobs by both Liz Truss and Mr Sunak.
The ethics report also found Mr Zahawi had not told the truth when reports first emerged last July that he was being investigated by HMRC.
The minister said a claim that “HMRC are looking into me” was a “smear”. Sir Laurie said this was an "untrue public statement" that he failed to correct without delay.
In the conclusion of his letter to Mr Sunak, the ethics adviser wrote: “Mr Zahawi’s conduct as a Minister has fallen below the high standards that, as Prime Minister, you rightly expect from those who serve in your government.”
In his response, Mr Zahawi made no apology or mention of the breaches of the ministerial code.
Instead, he added: "I am concerned, however, about the conduct from some of the fourth esate in recent weeks.
"In a week when a Member of Parliament was physically assaulted, I fail to see how one headline on this issue 'The Noost Tightens' reflects legitimate scrutiny of public officials.
"I am sorry to my fmily for the toll this has taken on them".
In response, the Liberal Democrats Deputy Leader Daisy Cooper said Mr Zahawi should stand down from Parliament.
She said: “Given this was a serious breach of the ministerial code, Nadhim Zahawi must also do the right thing and resign as an MP.
"He has shown he is unfit to serve in Cabinet and unfit to serve the people of Stratford-on-Avon.”
She added: “Rishi Sunak has finally acted after spending days defending the indefensible on Nadhim Zahawi. It should never have taken him this long to act. Sunak's first 100 days in office have been tarnished by endless Conservative sleaze and scandals.
“Serious questions remain about what Sunak knew about Zahawi’s tax affairs when he appointed him. We need a proper independent inquiry to establish the facts and hold the Prime Minister to account."
The ex-Tory Cabinet minister Michael Portillo also told GB News that Mr Sunak's failure to sack Mr Zahawi earlier made him look "weak".
He said: "This thing has been in the headlines now for days and days and days and it's been doing terrible damage to the government.
"And to him and to the party. I think he did have an opportunity to get rid of him earlier... It pains me to say this, but I think on the whole it makes Rishi look weak.
"I think he must have been kicking himself all week that he decided to refer this to an investigation rather than going with a decision straight away."
Labour's Shadow Education Secretary Bridget Phillipson said: “Nadhim Zahawi failed to pay the taxes he owed in this country and tried to silence those who spoke out about it.
"Despite the writing on the wall, the Prime Minister showed himself to be too weak to act.
"Rishi Sunak should have sacked Nadhim Zahawi a long time ago, just as he should have acted over Dominic Raab and Suella Braverman, but in his weakness he promoted them."
She went on: "The reason this keeps happening is we have a Government whose only principle is party first, country second. The Tories are governing in their own interests, with a Prime Minister who is trying to manage his MPs, rather than govern in the national interest. It's vital that we now get answers to what Rishi Sunak knew and when did he know it.
"We need to see all the papers not just have the Prime Minister's role in this brushed under the carpet."
Levelling Up Secretary Michael Gove also said he was not aware of any other minister who will have to quit over wrongdoing, but that he cannot "make windows into men's souls, or women's".
Speaking on the BBC's Sunday With Laura Kuenssberg programme, he was asked if he could guarantee that no other Government minister is going to end up having to quit over any financial wrongdoing or issues with their tax affairs.
Mr Gove said: "To the best of my knowledge I can't think of anyone who would be in that position. I can't make windows into men's souls, or women's. I can't know that there isn't someone anywhere in politics or elsewhere who might not have, through inadvertence or a desire to cut corners, done something wrong.
"All I would say is that in a properly, what's the word, Christian sense, we should be ready to forgive as well as to judge."
Earlier No10 was forced to deny claims Mr Sunak was warned of the possible reputational risk to the Government over the appointment of Nadhim Zahawi.
According to The Observer, Mr Sunak, who became Prime Minister in October after Liz Truss's Government imploded, was warned over Mr Zahawi's tax affairs.
It was claimed Government officials gave Mr Sunak informal advice when he was drawing up his top team regarding the risks from an HMRC investigation.
But a No10 spokesperson said: "These claims are not true. The Prime Minister was not informed of these details, informally or otherwise."
