Mark Menzies is set to stand down at the next election and has left the Conservative Party after being found to have exhibited a “pattern of behavior” that fell below standards for an MP.
Filde had been accused of using party funds to pay off “bad people”.
The party said it was “unable to conclude” whether party funds were misused because the funds came from an entity outside its authority.
Mr Menzies has previously strongly denied the allegations.
The MP was suspended by the Conservative Party earlier this week after allegations surfaced in The Times that he telephoned a Conservative Party activist in the early hours of December last year to demand £5,000.
Mr Menzies is also accused of using £14,000 of party funds to pay for medical bills.
Mr Menzies said in a statement on Sunday that he was stepping down “due to pressure on myself and my elderly mother”.
“This has been a very difficult week for me and I ask that you respect my family’s privacy.”
The Conservative Party said it had completed an internal investigation and found that the funds transferred to Mr Menzies were “signed by two Fylde Westminster Group signatories”.
The party said the group was “outside the remit” of the Conservative Party and the local Fylde Conservative Association, adding: “We therefore cannot conclude that there has been any misuse of Conservative Party funds.”
“However, we believe there was a pattern of conduct that fell below the standards expected of MPs and individuals who control contributions to local campaign funds outside of the Conservative Party’s direct control.”
The agency’s investigation also found that Mr Menzies may have breached the Nolan Principles, which should guide public servants. They are selflessness, honesty, objectivity, accountability, openness, integrity, and leadership.
The statement added: “This is due to the nature of the allegations made, but also due to the recurring nature of these individual allegations. These will be considered by the Conservative Party’s parliamentary governance team.” Stated.
On Friday, Labor Party chairwoman Anneliese Dodds wrote to Lancashire Police asking for an investigation.
The force said: “We have received a letter detailing our concerns regarding this matter and are currently reviewing the available information in more detail.”
Mr Dodds said on Sunday that the Conservative Party, which first learned of the allegations about Mr Menzies in January, had “come out of hiding and explained what action it had taken to deal with these shocking allegations”. He said there was a need to do so.
Following the announcement of the results of the investigation, the Conservative Party pledged to “share any information with police if we believe it could help the investigation”.
He added: “Any suggestion that the party is not seriously considering this issue is clearly false.”
The party announced it would retrain individuals across the party on how to manage “accounts outside the Conservative Party’s remit” and set up a whistleblower helpline.
There will be no by-election in the constituency as Mr Menzies will remain in office as an independent until the next election.
