Grant Shapps has admitted "screwing up" the dates he had a second job as an MP after he denied working under the pen name Michael Green when he was elected to Parliament in 2005.
The Tory chairman, who heads up his party's general election campaign, had told LBC Radio that he had "never had a second job" as the web marketer while in the Commons.
But a recording from 2006 was published by the Guardian, where the senior Conservative can be heard boasting that he could make prospective customers a "ton of cash by Christmas".
The minister has now told the BBC that his denial was "over firm" after he took to Twitter to defend himself over the "old story".
Labour have seized on the admission and have called for the 46-year-old Welwyn Hatfield MP to be dropped from his ministerial post.
John Mann, Labour MP for Bassetlaw, wrote to David Cameron and called on the prime minister to sack Shapps from the government.
"To continue to have Shapps as chairman of the Conservative Party would be your problem – but to have him as Minister without Portfolio is untenable. I am therefore calling on you today to remove Shapps as minister without portfolio," Mann said.
The revelation will be a distraction for Cameron and the Conservatives with less than 60 days to go before the general election in May.
The latest opinion poll from YouGov put Labour and the Tories neck-and-neck (34% vs 34%).
The survey, which questioned more than 1,600 voters, also put Ukip on 14%, the Liberal Democrats on 7% and the Greens on 6%.