MP David Chaytor has vowed to clear his name in the wake of a furore over his Parliamentary expenses.

In an exclusive interview with the Bury Times, the beleaguered Bury North MP has “apologised unreservedly” to his constituents and says he is hoping to overturn his suspension from the Parliamentary Labour Party.

As the political fall-out rages on over allegations that he wrongly claimed £12,925 in mortgage insurance payments on a London flat, the 59-year-old declared yesterday: “I am ready to fight my case and clear my name.”

Mr Chaytor admitted the last few days have been the “worst of his life” following the controversy over his expenses and the death of his mother on Sunday.

The MP, who last week had been on a Parliamentary trip to America, flew back to the UK overnight on Friday and into a political storm after the Daily Telegraph published allegations over his expenses. The newspaper reported that between September 2005 and August 2006, he claimed £1,175 a month for mortgage interest on a Westminster flat. According to the Telegraph, Land Registry records showed the mortgage on the flat had been paid off in January 2004.

The newspaper also stated that since 2004, David Chaytor had claimed for five different properties, allegedly “flipping” his designated homes between London, Yorkshire and Bury.

In a statement published in Saturday’s Telegraph, the MP said: “In respect of mortgage interest payments, there has been an unforgivable error in my accounting procedures for which I apologise unreservedly. I will act immediately to ensure repayment is made to the fees office.”

Meanwhile, the Metropolitan Police has set up a panel to assess allegations of misuse of MPs’ expenses.

Mr Chaytor told the Bury Times that he referred himself to the Parliamentary Standards Commissioner and was told to seek legal advice. He was then suspended from the Parliamentary Labour Party.

This week he has also been grieving the loss of his 81-year-old mother, Olive, who died in her sleep on Sunday at a home in the Bury area after a long illness.

In a formal statement issued to the Bury Times, Mr Chaytor said: “I fully recognise that there has been an error in respect of a particular claim against parliamentary allowances in the year 2005/6.

“I am confident that I can clear my name and will co-operate fully with the Commissioner’s investigation.

“I know that the news last weekend will have come as an enormous shock to my local party and my constituents in Bury North. Quite understandably, many people will have been deeply angered by what they heard last weekend. I want to apologise unreservedly for the problems that have been caused by my error.

“I also want to thank the enormous number of people who have sent me messages of support and understanding during the last few days – I deeply appreciate and value their kind words.

“At the same time, I am determined to clear my name. I will co-operate fully with any investigation and will now assemble all the evidence necessary to refute the allegation.”

Because of his bereavement, Mr Chaytor cancelled a planned appearance at a meeting of the Bury North Constituency Labour Party tonight at which he was to answer questions on the expenses row.

However, the MP hopes to convene what is described as a “formal private discussion” with party colleagues in Bury before the weekend.

Mr Chaytor added: “Without doubt, this has been the worst few days of my life. But I’m now beginning to come out of it. I am ready to fight my case and clear my name.

“The pressure not just on me but my family has been immense. It’s been very difficult, but we’re getting there. As far as my suspension from the Parliamentary Labour Party is concerned, I will be seeking to have that overturned as soon as possible.”

Although reluctant to comment fully on the allegations following legal advice, the MP went on: “I am determined to fight this all the way. Parliament will now be looking at all MPs’ returns and I am keen for that to be done.”

Asked to comment on Prime Gordon Brown’s statement that MPs found to have broken the rules would not be candidates at the next General Election, he said: “I can agree with Gordon Brown and his ruling.” But he declined to speculate whether he would be defending his own seat.