Duncan Smith has come out fighting
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Parliamentary Standards Commissioner Sir Philip Mawer is beginning his formal investigation into Iain Duncan Smith's employment of his wife as diary secretary.
He decided to go ahead with the inquiry after receiving further evidence from the investigative journalist Michael Crick over claims questioning whether Betsy Duncan Smith did enough work to justify her salary.
The Tory leader has denied the allegations and attacked "cowards in the shadows" inside his party for trying to attack him through his wife.
Mr Duncan Smith insists he will be cleared by the inquiry and he has already submitted evidence which he says refutes the claims against him.
Sir Philip Mawer wants anyone with more information to come forward by the end of this week and says anonymous sources behind the complaints must "put up or shut up".
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I believe I will be exonerated at the end of it
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The outcome could still decide Mr Duncan Smith's future as party leader, with his performances in Prime Minister's question time on Wednesday and elsewhere coming under particular scrutiny.
But commentators suggest the inquiry may give the Tory leader some breathing space, with no-one wanting to be seen to move against him while the investigation is ongoing.
His MPs will have a chance to discuss it all at a regular meeting of the 1922 committee, which represents all Tory backbenchers, later on Wednesday.
A considerable number of them reportedly continue to believe Mr Duncan Smith is not the man to lead them but the leadership continues to round on plotting and sniping.
Sir Philip has already read both an original dossier about the allegations handed over by investigative journalist Michael Crick on Monday, plus a further seven-page statement handed over on Tuesday.
He had also read and discussed a 40-page dossier from Mr Duncan Smith rebutting the charges.
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These cowards have gone after my wife as a way of getting to me and I think it's intolerable, absolutely intolerable
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Sir Philip said the nature of the information given to him meant it was in the "public interest" that he undertook further inquiries "properly, fairly to everybody concerned and expeditiously".
But the fact he was investigating did not mean the claims against Mr Duncan Smith were substantiated, he said.
"People who want to make serious allegations against an MP... have got to be prepared essentially to put up or shut up," added the watchdog.
Mr Duncan Smith told the BBC: "These cowards have gone after my wife as a way of getting to me and I think it's intolerable, absolutely intolerable. I love my wife dearly."
He said his critics had "picked the wrong fight" and promised to consign them to the "shadows" permanently.
BBC political editor Andrew Marr said he had recently heard of three members of the shadow cabinet who had been gathering their supporters together and were thinking in terms of a further challenge to Mr Duncan Smith.
Perspective call
Shadow chancellor Michael Howard told BBC Radio 4's Today programme on Wednesday: "It is a serious situation, I'm afraid, when there are some people within the Conservative Party who do seem determined to distract us from our duty to hold the government to account."
Mr Howard appealed for "some balance, some calm and some perspective".
"You would never guess from some of the hysteria surrounding this matter that the present cabinet contains a senior member who was found guilty by the previous commissioner of using money from public funds for political campaigning and of intimidating witnesses," he said.
The revelations of the Hutton inquiry were also far more important, he added.
Lord Black of Crossharbour, who owns the Telegraph group of newspapers, said: "I myself do not believe that he (Iain Duncan Smith) is in any sense a corrupt man...
"However, there is a legitimate question about whether he has the credibility of a party leader capable of being an alternative prime minister."
But shadow work and pensions secretary David Willetts told BBC News: "I think that everybody here has complete confidence in Iain and we are very much looking forward to the rapid conclusion of the inquiry."