Watchdog to probe Osborne's expenses

The Times reported last month that Osborne had funded the purchase of a farmhouse in Cheshire in 2000 by increasing borrowing on his London home.

He later designated the London house as his "second home," even though it was his main residence, so he could claim the mortgage interest payments on expenses, The Times said.

Osborne's spokesman said he had never switched the designation of his second home for personal advantage and denied any impropriety.

Voters are furious that many MPs have apparently milked the expenses system, claiming taxpayer funds for everything from hiring porn films to cleaning their swimming pools, at a time when ordinary people are having to scrimp.

Osborne's Labour counterpart, Chancellor Alistair Darling, apologised and agreed to repay 350 pounds last month after overclaiming expenses on a property he owned.

(Reporting by Adrian Croft; Editing by Richard Meares)