David Cameron backs Grant Shapps despite Tory chairman admitting he 'screwed up'

David Cameron continues to have full confidence in Grant Shapps, the Tory party chairman who admitted this morning that he “screwed up” over his denial that he held a second job as a “multimillion-dollar web marketer” under a pseudonym while also an MP.

The Tory party chairman had repeatedly denied that he had continued to run his online marketing firm after being elected as an MP in 2006.

Last month he told LBC radio he had "never had a second job" and in November he instructed his lawyers to force a local constituent and ex-Labour councillor to apologise for writing an allegedly libellous post on Facebook over his use of his pseudonym Michael Green.

But this morning Mr Shapps said he had denied holding a second job "over firmly" when speaking last month.

The prime minister’s spokesman said Mr Shapps had “done the right thing in acknowledging the mistake he has made” and said he still enjoyed the prime minister’s full confidence.

"The right thing, where a mistake has been made, is to explain that, and that is what Grant has done,” the spokesman added. "Grant has said it was a mistake and the Prime Minister absolutely accepts that.”

A recording of Mr Shapps emerged last night of the Welwyn Hatfield MP boasting about expanding the business throughout 2006.

Speaking under the pseudonym Michael Green, he says his products – including an advice book titled Stinking Rich 3 – would make listeners “a ton of cash by Christmas”, according to the audio obtained by the Guardian.

Labour has called on David Cameron to launch an "immediate" inquiry into his conduct.

John Mann, Labour MP for Bassetlaw, called on Mr Shapps to quit as Tory party chairman over his failure to tell the truth.

"The Government made a big play after the expenses scandal of bringing back integrity to politics and this does the exact opposite," he told the BBC.

"You can't have a government minister who isn't honest and breaches one of those standards.

"That's what the standards are there for. He has breached them and he should go as Minister without Portfolio."

The company How To Corp, which Mr Shapps was fronting at the time under the alias, was listed in his parliamentary register of interests in 2006.

But he had repeatedly denied using it while working as an MP, even threatening legal action against a constituent who made the allegation.

A Tory party spokesman told the Guardian that Mr Shapps now concedes “his writing career [as Green]... ended shortly after [becoming an MP].”

The company was founded by Mr Shapps in 2000 and registered at Companies House in 2005. He transferred his share in the firm to his wife in 2008, and the company was dissolved last year.

Only last month, Mr Shapps told radio station LBC he had not used the pen-name whilst working as an MP.

He said: “To be absolutely clear: I don’t have a second job. And I have never had a second job whilst I being an MP. End of story.”

However, yesterday, a statement put out by the Conservative press office said: ““Like many authors and journalists, Grant wrote with a pen name. This was completely transparent: his full name and biographical details were permanently published on the company’s main website.

"Given that this was a decade ago, and was mentioned during the cut and thrust of an interview, he referenced that his writing career had ended when he became an MP: in fact it ended shortly afterwards.”