The Daily Telegraph identified the peer as frontbench transport spokesman Lord Hanningfield, who is also leader of Essex County Council and has a full-time chauffeur provided by the local authority at taxpayers' expense.

Records show the peer claimed £17,120 in the year ending March 2008 for the cost of staying overnight in London in order to attend the Lords - the Telegraph said that his claims totalled £100,000 over seven years.

It also emerged shadow chancellor George Osborne is facing a sleaze probe over his second home expenses after a Commons watchdog accepted a complaint from a senior Labour activist.

Parliamentary Commissioner for Standards John Lyon said he would investigate an allegation that the Tory MP "claimed for mortgage payments that were not necessarily incurred".

The Telegraph reported that detectives from the Metropolitan Police specialist crimes unit want to establish whether Lord Hanningfield actually stayed in London on the evenings for which he claimed, rather than returning to his home near Chelmsford.

Rules state that peers whose main home is outside the capital can claim an allowance of £174 a night if their stay is "for the purpose of attending sittings of the House". Receipts are not required.

Lord Hanningfield told the Telegraph he could justify all his expenses and blamed questions over his claims on a "vindictive campaign against me".

Mr Osborne was said by a spokesman to be "relaxed" that his mortgage arrangements were above board and dismissed the allegations as a politically-motivated attack.

The Commissioner is to examine a complaint that Mr Osborne took out an allowances-subsidised home loan on his home in Cheshire for nearly £5,000 more than the £445,000 he originally paid for it.