Mr Zahawi denounced “unfair” reports about his financial affairs and pledged to publish his tax return annually if he becomes Prime Minister, while his predecessor as chancellor faced a critical dossier declaring “there is nothing Conservative about the ‘Big Tax and Big Spend’ agenda of Rishi Sunak”.
It came as a new contender joined the fray in the form of Foreign Secretary Liz Truss who pledged to reverse the controversial national insurance hike if made Tory leader, as she insisted she can be “trusted to deliver”.
The senior Cabinet minister, who is widely expected to be a front-runner in the already crowded race, promised to “start cutting taxes from day one” to help with the cost of living.
The launch of her campaign, in an article in the Daily Telegraph, came hot on the heels of the arrival in the contest of international trade minister Penny Mordaunt who said the government needed “to become a little less about the leader and a lot more about the ship”.
There was also a surprise entry into the race when little-known Gillingham MP Rehman Chishti declared his candidacy promising “aspirational conservatism”.
It means 11 Tories have now put themselves forward to replace Boris Johnson as Prime Minister, just days after his resignation.
Sir Graham Brady, the chairman of the Conservative Party’s 1922 committee, is expected to announce the timetable for the leadership campaign on Monday and faces increasing pressure not to drag out the process for fear the party could be torn apart by in-fighting.
The Daily Telegraph reported the anti-Sunak “dirty dossier”, which was being spread via Tory WhatsApp group, accused him of supporting the Prime Minister’s “reckless over-spending” and of raising taxes.
The memo urged MPs to “keep this a Conservative Party with a small ‘c’” and also criticised him personally for holding a US Green Card while serving as Chancellor while saying his personal appeal to voters was weak with his personal polls “in negative territory”.
His successor at Number 11, Nadhim Zahawi, hit out at reports his financial affairs had been investigated by the National Crime Agency (NCA) and the Serious Fraud office (SFO).
Mr Zahawi, who is believed to be one of the richest MPs in the commons, said: “These smears have falsely claimed that the Serious Fraud Office, the National Crime Agency, and HMRC are looking into me. Let me be absolutely clear. I am not aware of this. I have not been told that this is the case.
“I’ve always declared my financial interests and paid my taxes in the UK. If there are questions, of course, I will answer any questions HMRC has of me.”
Former Tory leader Lord Hague of Richmond was among senior figures to call for restraint, saying “some calm reflection” was needed.
He said: “Conservatives should be careful not to spend their time undermining some of their own leading figures.”
Tax and Brexit have become the main battlegrounds for the contest with former health secretaries Jeremy Hunt and Sajid Javid both saying they would slash corporation tax, while backbencher Tom Tugendhat pledged to back the Northern Ireland Protocol Bill if elected leader.
Mr Hunt also said he would press on with the Government’s controversial plans to overwrite parts of the post-Brexit treaty.
The current candidates also include Transport Secretary Grant Shapps, Attorney General Suella Braverman and ex-minister Kemi Badenoch.
There was also a boost for Badenoch when former cabinet minister Michael Gove came out as a supporter, telling The Sun “She is brave, principled, brilliant and kind”.
Mr Javid said his tax-cutting plans would cost around £39 billion per year and said the country could afford to scrap the national insurance hike and still fund the promised boost for the NHS and social care.
But Mr Hunt said he would not reverse the tax rise because “the NHS needs the money” from the health and social care levy.
Mr Shapps advocated for lower taxes, as well as a cut to “red tape”.
He told Sophy Ridge on Sunday he would introduce the planned 1p income tax cut “immediately” in an emergency Budget.
Mr Tugendhat emphasised he was a “clean start” candidate.
Asked about whether he would consider cutting corporation tax as prime minister, he told Sophy Ridge pledges by his opponents to do so were “not realistic unless you have a 10-year economic plan”.
Ms Braverman also announced her intention for the UK to pull out of the jurisdiction of the European Court of Human Rights.
It comes after the Strasbourg court, which rules on the European Convention on Human Rights, disrupted the UK’s flagship Rwanda policy.
