THE Electoral Commission has announced it will launch an investigation into the refurbishment of Boris Johnson’s Downing Street flat.
The Prime Minister has been accused by former aide Dominic Cummings of wanting donors to "secretly pay" for the work in a "possibly illegal" move.
Downing Street has refused to say whether Johnson received an initial loan from the Conservative Party to cover renovations to his residence in No 11.
Opposition parties have accused him of having "lied" over the funding, and said senior members of the Government have been involved in a possible "cover-up".
An Electoral Commission spokesperson said: "We have been in contact with the Conservative Party since late March and have conducted an assessment of the information they have provided to us.
"We are now satisfied that there are reasonable grounds to suspect that an offence or offences may have occurred. We will therefore continue this work as a formal investigation to establish whether this is the case.
"The investigation will determine whether any transactions relating to the works at 11 Downing Street fall within the regime regulated by the Commission and whether such funding was reported as required.
"We will provide an update once the investigation is complete. We will not be commenting further until that point."
READ MORE: Boris Johnson ‘living it up like a modern-day Louis XVI’ in Downing Street flat
The commission can issue fines of up to £20,000, with most cases deciding whether to impose a sanction if it is satisfied beyond reasonable doubt that an offence has occurred. But it can also refer investigations under the Political Parties, Elections and Referendums Act 2000 to the police or prosecutors.
Investigators can demand documents, information and explanations, and could potentially seek a statutory interview with the Prime Minister as part of the process.
The announcement came as former private secretary to the Queen Lord Geidt was appointed as the new independent adviser on ministers' interests. The post has been vacant since Sir Alex Allan resigned in November after Boris Johnson overruled him in relation to a report on Priti Patel's conduct.
The appointment of the new adviser paves the way for the publication of the latest register of ministerial interests, which could contain details of any donations to fund the Downing Street flat.
Johnson and the crossbench peer have agreed he will begin his new role as independent adviser on ministers' interests "by ascertaining the facts surrounding the refurbishment of the Downing Street flat and advise the Prime Minister on any further registration of interests that may be needed", a Government statement said.
Earlier, Transport Secretary Grant Shapps insisted a review into the controversy by Cabinet Secretary Simon Case will answer whether the Tory party gave Johnson a loan, before the Prime Minister paid back the costs.
"I just don't have the answer but the Cabinet Secretary will and it will be transparently produced in the annual report and the accounts of the Cabinet Office," the Cabinet minister told Times Radio.
But Shapps declined to say whether he would have approved the funding when he was party chairman, instead telling BBC Breakfast: "My side of things was the campaigning side of things, I didn't get involved with the fundraising side of things."
Prime ministers get a budget of up to £30,000 per year to renovate their Downing Street residency, but newspaper reports have suggested Johnson has spent up to £200,000.
A No 10 spokeswoman has said that the costs "have been met by the Prime Minister personally" and that party funds "are not being used for this".
But Downing Street has refused to answer whether party funds were used in the past, as the Electoral Commission looks into the controversy.
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