Mark Menzies made the announcement after claims that he used political donations to cover medical expenses and pay off "bad people" who had reportedly locked him in a flat and demanded thousands of pounds for his release.

The backbench MP for Fylde in Lancashire disputed the allegations but was suspended from the Conservative parliamentary party while an investigation took place.

In a statement on Sunday, Mr Menzies said: "It has been an enormous privilege representing the people of Fylde since 2010, but due to the pressures on myself and my elderly mother, I have decided to resign from the Conservative Party and will not stand at the forthcoming general election.

"This has been a very difficult week for me and I request that my family's privacy is respected."

Lancashire Police said it was reviewing "information" about Mr Menzies after Labour asked for an investigation.

The claims surrounding Mr Menzies - which were branded "jaw-dropping" by former Scottish Tory leader Ruth Davidson - came to light after the outgoing MP's former campaign manager Katie Fieldhouse spoke to the Times.

Ms Fieldhouse claimed the Conservative Party was aware the allegations about Mr Menzies may have constituted fraud and alleged that the party's chief of staff "told me that when they first took over the investigation [from the Whips' Office] they had consulted solicitors".

She added: "He told me on the phone, 'the solicitor said it is fraud but you are not duty-bound to report it because it's not Conservative Party money'."

The whistleblower said she was told the decision not to inform the police was made because it was donors' money and not the party's.

The Tory Party subsequently launched its own internal investigation into the claims raised and whether there had been a misuse of its funds.

Following Mr Menzies's resignation, Ms Fieldhouse told Sky News "he's done the right thing".

Tory Party investigation concludes

On Sunday, a Tory Party spokesperson said the internal probe was now complete and could not conclude there had been a misuse of funds - but it did identify a "pattern of behaviour that falls below the standards expected of MPs".

"The money in question that was sent to Mark Menzies MP was signed off by the two signatories of Fylde Westminster Group," the spokesperson said.

"This body sits outside of the remit of both the Conservative Party and Fylde Conservative Association. Therefore we cannot conclude that there has been a misuse of Conservative Party funds.

"However, we do believe that there has been a pattern of behaviour that falls below the standards expected of MPs and individuals looking after donations to local campaign funds which lie outside the direct jurisdiction of the Conservative Party."

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The spokesperson said it would now be "commencing with retraining individuals across the party on how to manage these accounts which fall outside of the remit of the Conservative Party and are introducing a whistleblowing helpline".

They said a recommendation that Mr Menzies' actions had breached the Nolan principles of public life - among them selflessness, integrity and honesty - would also be reviewed by the party's member governance team.

"We will of course share any information with the police if they believe it would be helpful to any investigation they decide to undertake," they added.

"Suggestions the party has not been seriously examining this matter are demonstrably false as we have worked to protect the identities of all those involved whilst the facts could be established."

Following the publication of the claims, Mr Menzies agreed to give up the Tory Party whip, meaning he now sits as an independent MP in the House of Commons and will do so until the next election.