Liberal Democrat MP David Laws has resigned as Britain's Chief Secretary to the Treasury after admitting he claimed expenses to pay rent to his partner.

In a statement this evening, Mr Laws said he would be standing down with immediate effect.

He had earlier apologised and said he would pay back the money which the Daily Telegraph newspaper claimed amounted to £40,000.

Responding to his resignation letter, the British Prime Minister, David Cameron, described Mr Laws as an ‘honourable man’.

Mr Cameron added that he hoped that, in time, Mr Laws would be able to serve again.

Commentating on the resignation, Liberal Democrat leader and Deputy Prime Minister Nick Clegg said: ‘David Laws has taken a very painful decision today. It was his decision alone. I have enormous respect for the dignity and integrity with which he has acted today. David and I have been friends and close colleagues for many years.

Mr Clegg continued: ‘I have always admired his intelligence, his sense of public duty and his personal integrity. My admiration for him has only grown as I have seen how he has dealt with the cruel pressures of the last 24 hours.

‘There are clearly questions that David himself acknowledges must now be answered about his own expenses, and he did the right thing referring himself to the Parliamentary Commissioner for Standards.

‘When these questions have been addressed, I very much hope that there will be an opportunity for him to rejoin the Government.’

The British government has moved quickly to replace Mr Laws by appointing another Liberal Democrat in Danny Alexander.

Mr Alexander, 38, will move from the position of Scottish Secretary, to which he was appointed after the Conservative- Liberal Democrat coalition was formed earlier this month.