Nadhim Zahawi has been sacked from Government by the Prime Minister after he was found to have committed a 'serious breach' of ministerial rules.
The Tory chairman's exit comes as a result of a furious row over his tax affairs after he admitted to paying a penalty to HMRC as part of a tax bill.
The sum handed over to the tax authorities by Mr Zahawi is reported to be at least £4.8million, including a £1.1million penalty.
The revelation Mr Zahawi paid a penalty to HMRC forced Rishi Sunak - who is claimed to be 'livid' at the controversy - to order an investigation by his ethics adviser, Sir Laurie Magnus.
Sir Laurie has now ruled against Mr Zahawi and left Mr Sunak with little choice but to fire him from his Cabinet.
The dramatic culmination to the row over Mr Zahawi will come as a huge blow to the PM, who is due to mark his first 100 days in No10 this week.
Mr Sunak is also continuing to face questions over the fate of Deputy Prime Minister Dominic Raab, who is subject to an ongoing investigation into 'bullying' claims.
In a damning report to the PM on his findings, Sir Laurie revealed that Mr Zahawi initially failed to declare he was subject to an HMRC probe when he was appointed Chancellor by Boris Johnson in July last year.
This was a role that put him in charge of Britain's tax system and, Sir Laurie said, could have led to claims of a possible conflict of interest.
Sir Laurie also lambasted Mr Zahawi for failing to disclose that the tax investigation had ended with him paying a penalty when he was later appointed to other Cabinet roles by Liz Truss in September and then Mr Sunak in October.
In further criticism, Sir Laurie condemned Mr Zahawi for failing to correct his past denial that HMRC were investigating his tax affairs until this month.
In a letter to Mr Zahawi today, Mr Sunak wrote: 'Following the completion of the independent adviser’s investigation – the findings of which he has shared with us both – it is clear that there has been a serious breach of the ministerial code.
'As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.'
Nadhim Zahawi has been sacked from Government by the Prime Minister after he was found to have committed a 'serious breach' of ministerial rules
The dramatic culmination to the row over Mr Zahawi will come as a huge blow to the PM, who is due to mark his first 100 days in No10 this week
In a letter to Mr Zahawi today, Mr Sunak said the departing Tory chairman had committed 'a serious breach of the ministerial code'
The PM said Mr Zahawi should be 'extremely proud' of his 'wide-ranging achievements' in Government over the past five years, including his spell as vaccines minister during the Covid pandemic.
'Your role was critical to ensuring our country came through this crisis and saved many lives,' Mr Sunak added.
'And as the Conservative Party chairman, you have undertaken significant restructuring to Conservative Campaign Headquarters and readied us for important work in the coming months.'
Responding to Mr Zahawi's sacking, Labour's shadow education secretary Bridget Phillipson demanded Mr Sunak release 'all the papers' relating to the tax row.
'Nadhim Zahawi failed to pay the taxes he owed in this country and tried to silence those who spoke out about it,' she said.
'Despite the writing on the wall, the Prime Minister showed himself to be too weak to act.
'Rishi Sunak should have sacked Nadhim Zahawi a long time ago, just as he should have acted over Dominic Raab and Suella Braverman, but in his weakness he promoted them.
'The reason this keeps happening is we have a Government whose only principle is party first, country second.
'The Tories are governing in their own interests, with a Prime Minister who is trying to manage his MPs, rather than govern in the national interest.
'It's vital that we now get answers to what Rishi Sunak knew and when did he know it.
'We need to see all the papers not just have the PM's role in this brushed under the carpet.'
The Liberal Democrats demanded a 'proper independent inquiry' into the matter and called on Mr Zahawi to quit as MP for Stratford-on-Avon.
'Rishi Sunak has finally acted after spending days defending the indefensible on Nadhim Zahawi,' the party's deputy leader Daisy Cooper said.
'It should never have taken him this long to act. Sunak's first 100 days in office have been tarnished by endless Conservative sleaze and scandals.
'Serious questions remain about what Sunak knew about Zahawi’s tax affairs when he appointed him. We need a proper independent inquiry to establish the facts and hold the PM to account.
'Given this was a serious breach of the ministerial code, Nadhim Zahawi must also do the right thing and resign as an MP. He has shown he is unfit to serve in Cabinet and unfit to serve the people of Stratford-on-Avon.'
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