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Rishi Sunak has ordered an investigation into Nadhim Zahawi as he resisted calls to sack the Tory party chairman over his multimillion-pound tax dispute.

The prime minister asked new ethics adviser Sir Laurie Magnus on Monday to assess whether the cabinet minister breached the ministerial code with the HMRC settlement he made while he was chancellor, but it could extend to his prior tax arrangement and whether he lied to the media.

Mr Sunak retained confidence in the former chancellor but said he was launching an investigation because “clearly in this case there are questions that need answering”.

He added that he was not leader at the time of the allegations and insisted the advice he received when he gave Mr Zahawi a senior role was there was “no reason” not to appoint him.

But Labour leader Sir Keir Starmer said: “He promised us, his first words, integrity and accountability.

“Well, if those words mean anything, the prime minister should sack him and sack him today and show some leadership.”

Politics live: Zahawi told to quit – amid ‘clear evidence’ TV interview defence was ‘not true’

More on Nadhim Zahawi

Scotland’s first minister, Nicola Sturgeon, has also said Mr Zahawi’s position is “untenable”.

Earlier, a source close to the embattled Tory MP said he is “absolutely not going to resign” in the face of growing pressure over his settlement, estimated to be around £5m.

The government’s paymaster general, Jeremy Quin, told the Commons on Monday the process for the management of conflicts of interest, or potential conflicts, is “clear and robust”, however the PM has the ultimate say on appointments.

But he added: “It is a responsibility of all ministers to ensure that no conflict arises or could be reasonably perceived to arise between their role and their interests, financial or otherwise.”

The tax expert who investigated Mr Zahawi has joined calls for him to go, telling Sky News there is “clear evidence” he has not been truthful about his affairs.

Dan Neidle, the Founder of Tax Policy Associates and a Labour member, pointed to comments made by Mr Zahawi to Kay Burley last summer, while the then-chancellor was running to be leader of his party.

Mr Zahawi said he was “clearly being smeared” over questions about his affairs – and that he did not “benefit” from an “offshore trust”.

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Rishi Sunak has asked his independent ethics adviser to investigate Nadhim Zahawi

Speaking to Kay Burley on Monday, Mr Neidle said that a filing disclosure from YouGov – the polling company Mr Zahawi co-founded – showed he “received £99,000 from Balshore Investments”, a company based in Gibraltar.

Mr Neidle said: “That’s not my supposition or a guess – it’s absolute fact.

“And yet he denied that to you.”

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Mr Neidle said there could be “an innocent explanation” for Mr Zahawi’s tax error, which the Tory MP called “careless not deliberate”.

But he added: “I lack the imagination to see it and if there isn’t one, I think he should resign.”

What we still don’t know about Zahawi’s tax dispute

Former chancellor Nadhim Zahawi arrives at the Conservative Party head office in Westminster, central London. The embattled Tory party chairman has been under pressure since it was reported that he paid HMRC a seven-figure sum to end a dispute, with Labour calling for him to be sacked. Picture date: Monday January 23, 2023.
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Nadhim Zahawi did not answer questions when he arrived at Conservative Party headquarters on Monday

Questions about Mr Zahawi’s tax affairs have continued, even after he released a statement to “address some of the confusion about my finances”.

On Saturday he admitted he paid what HMRC said “was due” after it “disagreed about the exact allocation” of shares in YouGov.

But he did not disclose the size of the settlement – reported to be an estimated £4.8m including a 30% penalty – or whether he paid a fine.

Sky News understands he did pay a fine, and Mr Neidle said the use of the word “careless” confirms this.

He said “careless means something specific” in tax terms – “that you didn’t behave in a reasonable way”.

“A reasonable way is you instruct decent tax advisers. You tell them the truth, you follow their advice, you check your final tax returns as best you can.”

It is also not clear how much money Mr Zahawi made before settling the dispute.

Mr Neidle said: “I think he would have received about £27m and not paid tax on it until eventually he was forced to because it was being reported. He didn’t admit it, denied it, threatened to sue people and went to HMRC to quietly settle it.”

Mr Zahawi did not answer questions from reporters as he headed into the Conservative Party headquarters in Westminster earlier on Monday.

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Over 100 people killed in Gaza in 24 hours, officials say, marking deadliest day in a week

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Over 100 people killed in Gaza in 24 hours, officials say, marking deadliest day in a week

More than 100 people have been killed in Gaza within 24 hours, officials there have said – the deadliest day recorded in a week.

The Gaza health ministry said 123 people were killed, adding to the tens of thousands of fatalities during the near two-year war raging in the Strip.

It comes as officials said Israel’s planned re-seizure of Gaza City, which it took in the early days of the war before withdrawing, is likely weeks away.

Follow the latest: Netanyahu accused of having ‘lost the plot’

Palestinians shelter at a tent camp on a beach amid summer heat in Gaza City. Pic: Reuters/Mahmoud Issa
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Palestinians shelter at a tent camp on a beach amid summer heat in Gaza City. Pic: Reuters/Mahmoud Issa

Eastern areas of Gaza City were bombed heavily by Israeli planes and tanks, according to residents, who said that many homes were destroyed in the Zeitoun and Shejaia neighbourhoods overnight.

Al-Ahli hospital said 12 people were killed in an airstrike on a house in Zeitoun.

Israeli tanks also destroyed several homes in the southern Gaza city of Khan Younis, Palestinian medics said.

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Netanyahu vows to ‘finish the job’ in Gaza

They added that in central Gaza, Israeli gunfire killed nine people seeking aid in two separate incidents. The Israel Defence Forces (IDF) did not comment on this.

The number of Palestinians who died of starvation and malnutrition in Gaza has risen to 235, including 106 children, since the war began, following the death of eight more people, including three children, in the past 24 hours, the Gaza health ministry said.

Palestinians scramble to collect aid from trucks that entered through Israel, in Khan Younis. Pic: Reuters
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Palestinians scramble to collect aid from trucks that entered through Israel, in Khan Younis. Pic: Reuters

The malnutrition and hunger death figures have been reported by the Hamas-run ministry and have been disputed by Israel.

Israeli Prime Minister Benjamin Netanyahu said on Sunday: “If we had a starvation policy, no one in Gaza would have survived after two years of war.”

He also repeated the allegation that Hamas has been looting aid trucks and claimed uncollected food has been “rotting” at the border, blaming the UN for not distributing it.

Aid packages being dropped from a plane in Deir Al-Balah. Pic: Reuters
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Aid packages being dropped from a plane in Deir Al-Balah. Pic: Reuters

A Palestinian boy jumps over wastewater in Gaza City. Pic: Reuters
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A Palestinian boy jumps over wastewater in Gaza City. Pic: Reuters

The latest death figures come as Hamas held further talks with Egyptian mediators in Cairo with a focus on stopping the war, delivering aid and “enduring the suffering of our people in Gaza”, an official for the group said in a statement.

Egyptian security sources said the possibility of a comprehensive ceasefire would also be discussed.

This would see Hamas relinquish governance in Gaza and concede its weapons, with a Hamas official saying the group was open to all ideas as long as Israel would end the war and pull out of Gaza.

But the official added that “laying down arms before the occupation is dismissed as impossible”.

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Meanwhile, Mr Netanyahu reiterated that Palestinians should simply leave Gaza, an idea which has also been enthusiastically floated by US President Donald Trump.

“They’re not being pushed out, they’ll be allowed to exit,” Mr Netanyahu told Israeli television channel i24NEWS. “All those who are concerned for the Palestinians and say they want to help the Palestinians should open their gates and stop lecturing us.”

World leaders have rejected the idea of displacing the Gaza population, and Mr Netanyahu’s plan to expand military control over Gaza, which Israeli sources said could be launched in October, has increased global outcry over the widespread devastation, displacement and hunger in the enclave.

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‘See with your eyes the reality’

The humanitarian crisis in Gaza is at “unimaginable levels”, Britain and 26 partners said in a statement on Tuesday, warning: “Famine is unfolding before our eyes.”

The statement added: “Urgent action is needed now to halt and reverse starvation. Humanitarian space must be protected, and aid should never be politicised.”

It was signed by the foreign ministers of Australia, Belgium, Canada, Cyprus, Denmark, Estonia, Finland, France, Greece, Iceland, Ireland, Japan, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland and the UK.

Read more from Sky News:
West Bank: The city locked down by armed troops
Who were the journalists killed by Israel in Gaza?

The war in Gaza began on 7 October 2023 when Hamas killed about 1,200 people – mostly civilians – and abducted 251 others in its attack.

Most of the hostages have been released in ceasefires or other deals. It is believed Hamas is still holding 50 captives, with 20 believed to be alive.

Israel’s retaliatory offensive has killed more than 61,000 Palestinians, according to Gaza’s Hamas-run health ministry, which does not differentiate between militants and civilians in its count.

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Trump-Putin summit starting to feel quite ‘Midnight Sun’ – as White House confirms location

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Trump-Putin summit starting to feel quite 'Midnight Sun' - as White House confirms location

It’s beginning to feel like “Midnight Sun” diplomacy.

In parts of Alaska, the sun doesn’t set in summer, casting light through the night but leaving you disorientated.

Ukraine latest: Zelenskyy reject’s Putin’s proposal

The Trump-Putin summit is pitched as “transparent” but it’s difficult to find any path to peace right now.

White House press secretary Karoline Leavitt has reduced it to a “listening exercise” where Donald Trump will seek a “better understanding” of the situation.

There isn’t much to understand – Russia wants territory, Ukraine isn’t ceding it – but Ms Levitt rejects talk of them “tempering expectations”.

It’s possible to be both hopeful and measured, she says, because Mr Trump wants peace but is only meeting one side on Friday.

It’s the fact that he’s only meeting Vladimir Putin that concerns European leaders, who fear Ukraine could be side-lined by any Trump-Putin pact.

Volodymyr Zelenskyy claims Mr Putin wants the rest of Donetsk and, in effect, the entire Donbas region in eastern Ukraine.

He’s ruled out surrendering that because it would rob him of key defence lines and leave Kyiv vulnerable to future offensives.

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‘Steps have been taken to remedy the situation’ in Pokrovsk

European leaders – including Sir Keir Starmer – will hold online talks with Mr Zelenskyy twice on Wednesday, on either side of a virtual call with Mr Trump and US Vice President JD Vance.

Their concerns may be getting through, hence the White House now framing the summit as a cautious fact-finding exercise and nothing more.

The only thing we really learned from the latest news conference is that the first Trump-Putin meeting in six years will be in Anchorage.

A White House official later confirmed it would be at Joint Base Elmendorf-Richardson, a US military facility.

Read more:
The land Ukraine could be forced to give up
Trump gaffe reveals how central Putin is to his narrative

The US base where the talks will take place. Pic: Reuters
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The US base where the talks will take place. Pic: Reuters

Alaska itself, with its history and geography, is a layered metaphor: a place the Russians sold to the US in the 1800s.

A remote but strategic frontier where the lines of ownership and the rules of negotiation are once again being sketched out.

On a clear day, you can see Russia from Alaska, but without Mr Zelenskyy in the room, it’s difficult to see them conquering any summit.

In the place where the sun never sets, the deal might never start.

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Explained: The land Ukraine could be forced to give up – and will Russia have to concede anything?

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Explained: The land Ukraine could be forced to give up - and will Russia have to concede anything?

Any agreement between Donald Trump and Vladimir Putin when they meet on Friday could leave Ukraine in an impossible position after three years of brutal, grinding war for survival.

There has been speculation the two leaders could agree a so-called ‘land for peace’ deal which could see Ukraine instructed to give up territory in exchange for an end to the fighting.

That would effectively be an annexation of sovereign Ukrainian territory by Russia by force.

Ukrainian President Volodymyr Zelenskyy said on Tuesday evening that Mr Putin wants the rest of Donetsk – and in effect the entire eastern Donbas region – as part of a ceasefire plan.

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Sky’s Michael Clarke explains in more detail what territories are under possible threat.

But the Ukrainian leader said Kyiv would reject the proposal and explained that such a move would deprive them of defensive lines and open the way for Moscow to conduct further offensives.

Russia currently occupies around 19% of Ukraine, including Crimea and the parts of the Donbas region it seized prior to the full-scale invasion in February 2022.

President Trump has said he hopes to get “prime territory” back for Ukraine, though it’s uncertain what President Putin would agree to.

More on Russia

In this story, Sky News speaks to experts about what the highly-anticipated meeting between the Russian and American presidents could mean for the battlefield.

Donald Trump and Vladimir Putin are set to meet in Alaska. Pic: Reuters
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Donald Trump and Vladimir Putin are set to meet in Alaska. Pic: Reuters

A ceasefire along the frontline?

The range of outcomes for the Trump-Putin meeting is broad, with anything from no progress to a ceasefire possible.

Polish Prime Minister Donald Tusk, for instance, said this week that he has “many fears and a lot of hope” for what could come out of it.

Military analyst Michael Clarke told Sky News that the summit “certainly won’t create peace, but it might create a ceasefire in place if Putin decides to be flexible”.

“So far he hasn’t shown any flexibility at all,” he added.

A ceasefire along the frontline, with minimal withdrawals on both sides, would be “structurally changing” and an “astonishing outcome”, he said.

However he doubts this will happen. Mr Clarke said a favourable outcome could be the two sides agreeing to a ceasefire that would start in two weeks time (for instance) with threats of sanctions from the US if Russia or Ukraine breaks it.

Read more:
What Trump’s Putin gaffe reveals about upcoming meeting

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President Zelenskyy: ‘Path to peace must be determined together’

Will Ukraine be forced to give up territory to Russia?

While President Trump’s attitude to Ukrainian resistance appears possibly more favourable from his recent comments, it’s still possible that Kyiv could be asked to give up territory as part of any agreement with Russia.

Moscow has been focussed on four oblasts (regions) of Ukraine: Luhansk and Donetsk (the Donbas), Zaporizhzhia and Kherson.

President Putin’s forces control almost all of Luhansk, but about 30% of the others remain in Ukrainian hands and are fiercely contested.

“Russian rates of advance have picked up in the last month, but even though they are making ground, it would still take years (three or more) at current rates to capture all this territory,” Matthew Savill, director of military sciences at the RUSI thinktank, told Sky News.

He says it “wouldn’t be surprising” if Russia tried to acquire the rest of the Donbas as part of negotiations – something that is “highly unattractive” for Ukraine that could leave them vulnerable in future.

This would include surrendering some of the ‘fortress belt’ – a network of four settlements including Kramatorsk and Sloviansk – that has held back Russian forces for 11 years.

Michael Clarke said this might well satisfy President Putin “for now”, but many believe that he would return for the rest of Ukraine – possibly after President Trump leaves office.

It’s unclear if President Volodymyr Zelenskyy could accept such a painful concession – or indeed, survive it politically – or if the wider Ukrainian public would support it in return for a pause in the fighting.

Would Russia have to return any territory to Ukraine?

The White House appears to have been briefing that it might, though the situation is very unclear.

Mr Savill added: “The Ukrainians might want to even up the situation in the north, by removing Russian incursions into Sumy and near Kharkiv, but of greater importance would be getting the Zaporizhzhia Nuclear Power Plant back under Ukrainian control, given how much it would contribute to Ukrainian power needs.”

It’s also possible that Russia could be willing to withdraw from the areas of Kherson region that it controls.

It’s “plausible” they could get the power plant back, Mr Clarke said, but Russia would likely insist on maintaining access to Crimea by land.

This would mean that cities Mariupol and Melitopol – would remain in Russian hands, with all that that entails for the people living there.

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