The Liberal Democrat/ Conservative coalition has suffered a blow as David Laws has resigned over allegations that he has improperly claimed expenses.

The Treasury Chief Secretary became the new Government’s first casualty after it was revealed that he has claimed tens of thousands of pounds in public money which have been paid to his long-term partner.

In a statement at the Treasury, Mr Laws said:

“I do not see how I can carry out my crucial work on the Budget and spending review while I have to deal with the private and public implications of recent revelations.”

In his resignation letter to Prime Minister David Cameron, Mr Laws wrote:

“The last 24 hours have been very difficult and distressing for me, and I have been thinking carefully about what action I should take in the interests of the Government, my constituents and – most important of all – those whom I love.

“I am grateful for the strong support which I have received from my friends, family, and from you, the Deputy Prime Minister and the Chancellor. This support has been incredibly important, but nonetheless, I have decided that it is right to tender my resignation as Chief Secretary to the Treasury.”

Responding to the resignation letter, Mr Cameron wrote:

“The last 24 hours must have been extraordinarily difficult and painful for you.

“You are a good and honourable man. I am sure that, throughout, you have been motivated by wanting to protect your privacy rather than anything else. Your decision to resign from the Government demonstrates the importance you attach to your integrity.

“In your short lime at the Treasury, you have made a real difference, setting the Government on the right path to tackle the deficit which poses such a risk to our economy.”

Liberal Democrat Deputy Prime Minister Nick Clegg insisted he has great respect for the way Mr Laws has handled himself since the revelations emerged, and said his privacy has been shattered.

Downing Street has announced that Liberal Democrat Danny Alexander will take over from Mr Laws as George Osborne’s deputy at the Treasury, while Michael Moore will replace Mr Alexander as Scottish Secretary.