Yorkshire Labour MP will not face charges over his expenses claims

The MP was referred to Scotland Yard by the parliamentary authorities in September 2010 after concerns were raised over thousands of pounds of spending on laptops.

He also faced questions over bills for a constituency office which was housed in the garage of his South Yorkshire home.

Police have now announced that no action will be taken.

A spokesman said yesterday: “An initial file was submitted to the CPS on December 23 2011 and further inquiries were generated as a result. These further inquiries have now concluded following a decision that no further action will be taken by police. “This decision has been taken after careful consideration of the CPS advice.”

Mr MacShane, who has been Rotherham MP since 1994, had the Whip suspended by the Labour Party when the allegations emerged.

Labour said yesterday that it was lifting Mr MacShane’s suspension with immediate effect.

The backbencher will still face the resumption of an investigation by Parliamentary Standards Commissioner John Lyon, which had been put on hold while police considered the matter.

The case was the last being scrutinised by the Yard for possible criminal action following the expenses scandal which led to reforms to the system under which MPs claim for costs incurred during their work, such as travel and accommodation.

Mr MacShane is understood to be “very pleased” that the issue has been concluded three years after the original complaint was made.

The Commons authorities referred the matter to the Met 15 months later, and a formal police inquiry was only launched in January 2011.

Mr Macshane became a Government Minister in 2002, as Minister for Europe but left the position after Labour won the 2005 General Election.