A Conservative MP has lost the party whip over allegations he misused campaign funds and demanded thousands of pounds from an aide to pay off “bad people” in the middle of the night. Mark Menzies, 52, was suspended from the Tory parliamentary party on Wednesday night while an investigation is carried out. The Conservatives took action after the allegations were made public in a report by the Times. However, Labour has written to the Conservatives questioning whether the party has referred the matter to the police. Grant Shapps, the defence secretary, said the party had been aware of the claims “for a while” but “further information came to light yesterday”. Shapps told the BBC Radio 4 Today programme: “I understand that CCHQ have been aware of it for a while and have been investigating, and I think some new investigation has come to light subsequently.” Menzies denies the allegations and maintains he has followed all the rules about funding declarations. The case is the latest alleged misconduct scandal to rock the Conservative party. It comes only weeks after William Wragg, another MP who has now lost the Tory whip, claimed he handed over colleagues’ personal numbers to someone who had compromising material on him. According to the Times, Menzies phoned his former campaign manager, now a party volunteer, at 3.15am one night in December saying he had been locked in a flat by “some bad people” and needed £5,000 as a matter of “life and death”. Hours later, Menzies’ campaign manager paid him the sum, which had risen to £6,500, from her personal savings. She was reimbursed from campaign donations, the paper said. According to an account given to the Times by a source close to Menzies, he asked for the money after meeting a man he connected with on a dating website. The source said Menzies had gone to the man’s flat, before going with another man to a second address, where he continued drinking. People at the address falsely claimed he had been sick and demanded £5,000 for cleaning and other expenses, according to this account. The source close to Menzies told the Times he paid the money because he was afraid of what would happen if he refused, but had insufficient funds in his own savings. The source claimed he offered to repay the sum, but that local Tories who controlled the campaign funds said he did not need to. The Times also reported that Menzies phoned his then campaign manager four years ago asking her to give him £3,000 from campaign funds to cover medical bills, promising to repay the money later. According to the paper, £14,000 given by Conservative party donors for campaign activities was transferred to Menzies’ personal bank accounts and used for private medical expenses over the years. In a statement, Menzies said: “I strongly dispute the allegations put to me. I have fully complied with all the rules for declarations. As there is an investigation ongoing I will not be commenting further.” Anneliese Dodds, the Labour party chair, wrote on Thursday to the Conservative party chair, Richard Holden, questioning what she said was an apparent lack of action in relation to the “disturbing” allegations. “The Conservative party has reportedly been aware of these serious accusations for over three months. What action was taken, by whom, and when?” she wrote in the letter. Dodds asked a number of other questions, such as whether CCHQ had advised those involved to contact the police, and whether the party itself had reported the matter as well by this point. “These are deeply troubling allegations,” she said. “Rishi Sunak and the Conservative party have serious questions to answer about whether funds have been misused and why no action has been taken despite the allegations reportedly being known about since January.” A party spokesperson said: “The Conservative party is investigating allegations made regarding a member of parliament. This process is rightfully confidential. The party takes all allegations seriously and will always investigate any matters put to them.” The Liberal Democrats deputy leader, Daisy Cooper, said it was “frankly appalling” that the Conservative party had been aware of the allegations for more than three months. “When our national security faces threats on many fronts, it is deeply concerning that some MPs are so open to traps, threats and manipulations,” she said. A decade ago, Menzies quit as a ministerial aide after allegations about his behaviour by a Brazilian male escort.