Duncan Smith threatens to sue over claims he misused expenses

Iain Duncan Smithvowed yesterday to sue any newspaper or broadcaster that aired allegations of improprieties in the handling of his parliamentary expenses.

The Conservative leader arrived in Blackpool to be confronted by reports over the employment of his wife, Betsy, as a secretary. She was paid out of the public purse for several months after her husband succeeded William Hague, even though Mr Duncan Smith had access to party staff.

An investigation by BBC2's Newsnight into the subject was dropped by the corporation last week after intensive contact between its lawyers and those acting for Mr Duncan Smith.

The Tory leader attacked the claims as "false lies" in an interview with BBC 1's Breakfast with Frost. He said: "If anybody makes such allegations, I will sue them. I have a whole legal team who have been looking at this and I can tell you absolutely that they will find themselves with a lawsuit."

Oliver Letwin, the shadow Home Secretary, said: "The allegation is a complete twaddle and it's the lowest form of politics to be engaged in."

Leadership loyalists blame the speculation, which destabilised the run-up to the party conference which opens today, on Tory enemies attempting to undermine Mr Duncan Smith.

The investigative journalist Michael Crick has been working on the story, which he regards as one of the best of his career, for several months. Mr Crick is said to be so angry at the BBC's decision that he is threatening never to work for the corporation again.

The party has strongly denied any impropriety after receiving advice from its lawyers that the arrangement was legal and proper. A party spokesman said: "The allegations about Iain's employment of personal staff are totally false. Since these rumours started circulating around a week ago, Iain has been consulting his lawyers. He intends to take legal action against those who have published the allegations. Anyone who repeats the allegations will be sued for defamation."

The BBC's decision not to broadcast is understood to have been taken by the acting director general of the BBC, Mark Byford, who is standing in for Greg Dyke, who is on holiday.

A BBC spokesman said: "At any time a number of stories are being worked on by the Newsnight team but we do not enter into discussions on that sort of work in progress."