Caroline Spelman speaks outside her home in the Midlands
Conservative Party chairman Caroline Spelman has denied she was wrong to use her MP's parliamentary allowance to pay her children's former nanny.
Ms Spelman said the money was used to pay Tina Haynes for secretarial work she carried out between 1997 and 1998.
She said she acted "within the rules" but would refer the matter to the parliamentary standards commissioner.
Ms Haines earlier told the BBC that she took the occasional phone message and posted documents when needed.
Speaking outside her home in Solihull, Ms Spelman, MP for Meriden, explained that when she took the role in 1997 following the untimely death of her predecessor, using her nanny to do constituency administration was a "practical solution".
She said: "My prime concern was to make sure my constituents' needs were rapidly attended to as a new MP.
"Now at the time, I thought I was entirely within the rules - and that is still my belief but I will refer this series of events to the parliamentary standards commissioner."
For the time being, she may have done enough, certainly to retain the support of her leader and her party
Parliamentary rules prohibit MPs from spending their allowances on activities not directly related to their jobs.
Ms Spelman, who recently took charge of improving the Conservatives' record on expenses, said her home became the constituency office and Ms Haynes would answer the telephone, and open and sort the post.
"As a working mother that offered a practical solution because she could deal with the secretarial side when the children were at school."
Conservative Central Office said Ms Haynes - who was Ms Spelman's nanny from 1997 to 2002 - worked as Ms Spelman's constituency secretary for six hours a day between 1997 and 1998.
A party spokesman said: "Tina also provided childcare outside school hours and in return for this she received free board and lodging along with use of a car provided at Caroline's personal expense."
Once or twice a week you'd get the odd phone call from other MPs
Former nanny Tina Haines
But Ms Haynes told the BBC she only took the occasional phone message and posted documents when needed.
"Once or twice a week you'd get the odd phone call from other MPs. Mr Hague (the then Conservative leader) rang a couple of times and obviously I took messages if he rang and passed them on," she said.
The arrangement came to an end when the Conservative Party's chief whip told Ms Spelman it could be "open to misinterpretation", and she appointed a separate constituency secretary.
Shadow Chancellor George Osborne defended Ms Spelman, saying she "is someone of enormous integrity and honesty" and she was the "last person in Parliament" who would do something wrong.
The allegations have come at a sensitive time for both the Conservatives and Ms Spelman, who played a role in prompting the resignation on Thursday of Tory MEP leader in Brussels, Giles Chichester.
Mr Chichester stepped down as leader after Ms Spelman asked him to answer allegations that he had broken European Parliament rules on expenses.
Newsnight interview Caroline Spelman's former nanny
And on Friday another Tory MEP, Den Dover, was replaced as the party's chief whip in Brussels.
Mr Dover denies breaking any rules in paying his wife and daughter a reported £750,000 for work over nine years, and the Conservatives said the move was unrelated to the issue of expense.
Clearly, old habits die hard in the Tory Party despite what their leader says
Labour MP Kevan Jones
Former standards commissioner Sir Alistair Graham said the "constant stream of stories" about MPs' expenses was "very damaging" to the parliamentary system.
"It's not a party political matter - it is a matter of finding acceptable systems which will satisfy the public that members of parliament are not taking advantage of very generous rules which are loosely monitored," he told the BBC.
Labour MP Kevan Jones said there was "a big question mark" over Ms Spelman's use of allowances.
"Clearly, old habits die hard in the Tory Party despite what their leader says," he said.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.