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Mark Menzies will step down at the general election expected later this year after the Conservative party said the MP’s conduct fell “below the standards” expected of him following allegations he misused campaign funds.

The MP for Fylde in Lancashire said on Sunday he would not stand for re-election and announced he was resigning from the Tory party after being suspended last week pending an investigation into the claims.

Menzies has been accused of fraudulently using thousands of pounds in donations for medical bills and other personal expenses, according to The Times, which reported that the Conservative party had been aware of allegations against the MP for more than three months.

The party said on Sunday that it could not “conclude” there had been a misuse of party funds as the body that signed off on the spending sat outside the remit of either the central party or Menzies’s local Tory association.

“We do believe that there has been a pattern of behaviour that falls below the standards expected of MPs and individuals looking after donations to local campaign funds,” it added.

In a statement, Menzies said: “Due to the pressures on myself and my elderly mother, I have decided to resign from the Conservative party and will not stand at the forthcoming general election.” He previously told the Times he “strongly” disputed the allegations.

The MP’s decision to quit parliament amid sleaze allegations is another blow for the ruling party as it heads into May’s local election, a long way behind Labour in the polls.

Menzies’ decision to stay on until the general election means Prime Minister Rishi Sunak has avoided another difficult by-election. His party has lost 10 seats since the 2019 general election. Another contest is taking place on May 2 following the resignation of former Tory MP Scott Benton.

Benton, who holds a narrow majority of 3,690 votes, quit parliament earlier this year after being caught in a journalist sting offering to do paid lobbying work for a fictitious gambling company.

Nearly 70 Tory MPs elected in 2019 have said they will not stand again at the general election, which Sunak is expected to call later this year.

The Times reported on Wednesday that Menzies allegedly made a 3.15am call to a 78-year-old party volunteer last December demanding £5,000 of party funds to secure his release after claiming he had been locked up by “bad people” and that it was “a matter of life and death”.

The newspaper also reported claims that a second aide, who was Menzies’ long-serving constituency office manager, cashed in her Isa the following morning to supply the requested sum — which had risen to £6,500 — and was subsequently reimbursed with money donated by local supporters.

In addition, it said £14,000 given by donors for local Tory party campaign activities had been transferred to Menzies’ personal bank account and used for his private medical expenses.

Katie Fieldhouse, his former campaign manager, told the newspaper on Friday that lawyers had advised the Conservative party that Menzies’s actions amounted to fraud but officials did not feel “duty-bound” to report the matter as it was donor’s money rather than party funds.

Lancashire Police are reviewing the allegations made against Menzies following calls from Labour for an investigation.

The force said on Friday it had “received a letter” from Labour party chair Anneliese Dodds “detailing concerns around this matter, and we are in the process of reviewing the available information in more detail”.

The Conservative party said on Sunday it would share relevant information with the police “if they believe it would be helpful to any investigation they decide to undertake” and launch a whistleblowing helpline.

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