My wife earned no more than £15,000, says Duncan Smith

Journalist hands over second dossier to Parliamentary watchdog

Iain Duncan Smith launched a fightback against allegations that he made improper payments to his wife from parliamentary funds for acting as his secretary.

The Tory leader met Sir Philip Mawer, the parliamentary standards commissioner, for more than an hour last night and presented him with a 40-page dossier designed to refute claims about the scale of the work done for him by his wife, Betsy. It revealed that she was paid "no more than £15,000" between September 2001, when he became Conservative Party leader, and December last year, when she stopped working for him.

Earlier Sir Philip decided not to dismiss out of hand complaints that parliamentary rules were broken after studying evidence submitted to him by the investigative journalist Michael Crick.

Sir Philip said he will decide today whether to launch a full-scale investigation and Commons officials said his inquiry could take between two weeks and two months. This could leave a cloud hanging over the Tory leader at a time when he is fighting for survival in the job.

Today Mr Crick handed further evidence to Sir Philip regarding Mrs Duncan Smith's work - a Conservative Party document understood to paint a different picture of her activities than that set out in the Tory leader's document. Mr Crick insisted that he had no political axe to grind, saying that a number of senior Tories had made allegations over the past few months about the way in which Mr Duncan Smith employed his wife on the parliamentary payroll.

Rebel Tory MPs trying to oust Mr Duncan Smith believe the investigation has wiped out any benefit to the leader from his speech at last week's Conservative Party conference and from a weekend opinion poll that put the party five points ahead of Labour.

Tory dissidents said last night the controversy over his wife's payments had made a formal challenge to his leadership more likely. One said the rebels were increasingly confident they would secure the backing of the 25 MPs needed to trigger a vote of confidence.

But a defiant Mr Duncan Smith told Sir Philip at the meeting: "I totally reject claims reported in the media, and set out in Mr Crick's dossier presented to you today, that I was guilty of financial wrongdoing in the employment of my wife as my diary secretary after I became Conservative Party leader." In a seven-page summary of Mr Duncan Smith's evidence, published last night, his and his wife's account of her work was backed up by statements from four staff who worked for him at the time.

The report said his wife had worked for him for more than 10 years and had a signed contract to work 25 hours a week, although "she worked considerably longer hours than that". When he became Tory leader, she was described by her colleagues as the "sheet anchor" and it was their intention she give up the work once he had appointed his team.

Mrs Duncan Smith worked mainly from a fully equipped office at the family home in Swanbourne, Buckinghamshire, which enabled her to put in longer hours while juggling the school run. "Much of this work would be done after the children had gone to bed and often would involve Betsy Duncan Smith working until midnight," said the report.

But there was no statement of support from Vanessa Gearson, the Tory official who raised the issue of Mrs Duncan Smith's payments in an e-mail. The Tory leader's evidence says that Ms Gearson was "informed that all these matters were correct and carried out in line with Betsy Duncan Smith's contract". After reports that Ms Gearson came under pressure to sign a statement backing Mr Duncan Smith, Christine Watson, his private secretary, told the commissioner she had "never seen him act in a confrontational manner or subjecting people to intolerable pressure".

The report took a sideswipe at Mr Crick, saying that "surprisingly" he had not attempted to contact Ms Watson, who had "no criticism" of Mrs Duncan Smith's work. The other staff making statements in support of the Tory leader were Annabelle Eyre, his head of planning and tours; Andrew Whitby-Collins, his former diary secretary; and Rikki Radford, the Tory agent in Chingford and Woodford Green constituency, who testified to Mrs Duncan Smith's work in her husband's constituency but who was also interviewed by Mr Crick.

Michael Ancram, the Tories' deputy leader, said he was confident Sir Philip would clear Mr Duncan Smith of the "unfounded allegations" and blamed the affair on "malevolent" forces in the party trying to undermine him. He said the Tory leader had "every intention" of taking legal action over the claims after the commissioner's investigation.