An inquiry has been opened into the charitable status of a think-tank following complaints over its reported links with Chancellor Gordon Brown.
Mr Brown's office has denied any formal links with the institute
The Charity Commission said it had new information which raised "concerns" about some of the work of the left-of-centre Smith Institute.
The Tories called for an inquiry after claims a subsidiary group had held a seminar on how to beat David Cameron.
The think-tank also employed Mr Brown's ally Ed Balls. It denies wrongdoing.
'No formal relationship'
It is claimed that the Smith Institute breached the rules which govern the non-political status of charities.
It employed Mr Balls - now an MP - as an adviser while he was a Labour candidate before the 2005 election.
The Smith Institute also hosted more than 150 events at 11 Downing Street.
Last December, Mr Brown's office said the chancellor had "no financial nor any formal relationship" with the think-tank.
Tax-exempt charities are barred from involvement in politics.
The inquiry follows the Bloomberg news wire service obtaining details of a seminar organised last year by SI Events Ltd - a wholly owned subsidiary of the institute.
At it, former US Democrat campaign strategist Bob Shrum reportedly said Mr Cameron's attempt to relaunch the Conservative Party appeared to be modelled on George Bush's successful campaign for the presidency in 2000.
He reportedly argued that Labour should brand him "an empty opportunist who will do anything to win".
The Charity Commission has received complaints about the compatibility of the institution's actions and its charitable status from several sources, including the Conservative Party and the political blogger Guido Fawkes.
A spokesman said: "The decision to open an inquiry was taken in the light of new information we have received which raises concerns about some of the charity's work.
"The scope of the inquiry is to determine whether The Smith Institute is both established and operating as a charity advancing the education of the public in the field of study and research into the economy of the United Kingdom.
"The commission has informed the charity of this decision. The commission has been and continues to engage with the charity in relation to the issues raised."
The Smith Institute, founded in memory of former Labour leader John Smith, describes itself as "an independent think tank, which has been set up to undertake research and education in issues that flow from the changing relationship between social values and economic imperatives".
A spokesman said: "The Trustees have been vigilant in ensuring that the Smith Institute is operating within its charitable objects, and complies with the guidelines set out in the Charity Commission guideline CC9 (Revised 2004)."