Sir Keir Starmer has backed Tulip Siddiq, Downing Street indicated, after the Treasury minister was named in an anti-corruption investigation in Bangladesh.
Ms Siddiq is alleged to have been involved in brokering a 2013 deal with Russia for a nuclear power plant in Bangladesh in which large sums of cash are said to have been embezzled.
The Labour minister’s aunt, Sheikh Hasina, was until recently prime minister of Bangladesh for more than 20 years.
She is facing a wider investigation by an anti-corruption commission in the south Asian country after being deposed.
As economic secretary to the Treasury, Ms Siddiq is responsible for tackling corruption in the UK’s financial markets.
The Prime Minister’s official spokesman indicated Sir Keir continues to have confidence in Ms Siddiq.
She has “denied any involvement in the claims” accusing her of involvement in embezzlement, according to No 10, and continues to maintain her responsibility as a minister.
Pressed about whether there was any conflict of interest in Ms Siddiq’s involvement in the 2013 deal, the spokesman said: “I can’t speak to events that happened prior to a minister’s time in government.”
He added there was a “very clear declaration process” for ministers, which had been followed.
Ms Siddiq has not been formally contacted by relevant Bangladeshi authorities, it is understood.
She has been approached for comment, and the Labour Party has declined to comment.
But sources close to the minister have described the allegations as “spurious”.
The Conservatives suggested reports about Ms Siddiq revealed a “stain” on the Prime Minister’s judgement, and urged the Treasury minister to address the claims directly.
Matt Vickers, a shadow Home Office minister, said: “It is high time she came clean. The British public deserve a Government that is focused on their priorities, not distracted by yet another scandal.”
The investigation is based on allegations made by a political opponent of Ms Hasina, Bobby Hajjaj.
Former Bangladeshi leader Ms Hasina fled to India in August following an uprising, and is regarded by her critics as an autocrat.
They have since accused Ms Hasina, the leader of Bangladesh’s Awami League political party, of multiple crimes.
Ms Siddiq, the MP for Hampstead and Highgate, was first elected in 2015.
In court documents seen by the BBC, Mr Hajjaj claims Ms Siddiq mediated and co-ordinated meetings as part of a deal between the Bangladeshi and Russian governments to build the Rooppur Power Plant.
It is also claimed that Ms Hasina and members of her family siphoned off cash from the deal for their own private use.
Associated Press footage from 2013 shows Ms Siddiq attending the signing of the deal between her aunt and Russian president Vladimir Putin at the Kremlin.
