British Prime Minister Rishi Sunak fired the Conservative Party chair Nadhim Zahawi from government after an investigation found he had been insufficiently open about a tax probe which he settled while finance minister.

In an embarrassing episode for Mr Sunak, he initially stood by Mr Zahawi before ordering an independent adviser to investigate questions over his tax affairs after it emerged Mr Zahawi had settled a probe by Britain's tax authority HMRC last year.

Mr Zahawi has said the tax body ruled he had been "careless" with his declarations but had not deliberately made an error to pay less tax.

But Mr Sunak's independent adviser Laurie Magnus said that Mr Zahawi did not declare that his tax affairs were being investigated when he was briefly made finance minister last year, and failed to disclose details when Mr Sunak appointed him to his current role.

"Following the completion of the Independent Adviser's investigation – the findings of which he has shared with us both – it is clear that there has been a serious breach of the Ministerial Code," Mr Sunak said in a letter to Mr Zahawi.

"As a result, I have informed you of my decision to remove you from your position in His Majesty's government."

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Mr Zahawi's response to Mr Sunak did not mention either the HMRC or independent adviser's investigation.

He expressed concern at the conduct of some in the media in recent weeks and said he would support Mr Sunak's agenda as a backbench MP.

"I am sorry to my family for the toll this has taken on them" he said.

The Labour Party and some Tory MPs had said Mr Zahawi should have stood down earlier while Mr Sunak waited for the findings of Mr Magnus' investigation.

"It's vital that we now get answers to what Rishi Sunak knew and when did he know it," Labour's education spokesperson Bridget Phillipson said.

"We need to see all the papers not just have the Prime Minister's role in this brushed under the carpet," she said.

Mr Zahawi's sacking comes as Mr Sunak's government, facing decades-high inflation and a wave of public sector strikes, trails badly in opinion polls ahead of an expected 2024 election.

Rishi Sunak's government is trailing in opinion polls

Mr Magnus said that the details of HMRC's own investigation - relating to Mr Zahawi's co-founding in 2000 of opinion polling firm YouGov, and how many shares his father had taken to support its launch - was outside the scope of his own inquiry.

But he found that Mr Zahawi had failed to declare HMRC's probing of affairs, or acknowledge that they were a serious matter. Mr Zahawi had characterised reports last July over his tax affairs as "clearly smears".

Mr Zahawi did not correct the record until last week, when he said he had reached a settlement with the authorities.

"I consider that this delay in correcting an untrue public statement is inconsistent with the requirement for openness," Mr Magnus said in a letter to Mr Sunak.

He added that Mr Zahawi had shown "insufficient regard" for the requirement "to be honest, open and an exemplary leader through his own behaviour."

Mr Zahawi became finance minister following Mr Sunak's own resignation from the role in July last year, which helped end Boris Johnson's scandal-hit premiership.

When he replaced Liz Truss as prime minister after her brief but tumultuous time in power, Mr Sunak promised that "this government will have integrity, professionalism and accountability at every level."

But the reset has got off to a tricky start, and Mr Zahawi's sacking is the latest controversy within Mr Sunak's cabinet of senior ministers.

He reappointed interior minister Suella Braverman when he became prime minister just five days after Ms Truss sacked her for breaching security rules, while in November Gavin Williamson resigned from government over bullying allegations.

An investigation into alleged bullying behaviour by Deputy Prime Minister Dominic Raab is also ongoing.