MP Tom Brake has accused Sutton Conservatives of running a smear campaign against him over the lease of the historic Lodge building to a charity he is a director of.

He also said he was seeking legal advice over a story that appeared on political blog Guido Fawkes that accuses his staff members Callum Morton and Manuel Abellan, who are also councillors, of signing off on the ‘cushy deal’ for charity EcoLocal to lease the landmark for £1m less than its market value due to their connections with him.

The Conservatives have contacted both council and external auditors to investigate the deal, which they say was not transparent.

Mr Brake said: "I am disappointed, but not surprised at Conservative efforts to smear me.

"They must be desperate if they have to pretend that a charity and not-for-profit company I am a trustee of, and have no pecuniary interest in, is ‘my company’.

"I am, however, surprised that they have decided to oppose plans supported by a wide range of local groups to keep the Lodge partly as a community asset, and seem to be favouring instead allowing private developers to build flats in the Ecology Centre grounds.

"This, of course, is what they wanted to do many years ago, just before they lost control of the council."

Councillors Morton and Abellan said there were no grounds for declaring an interest as there was no interest to declare.

Conservative leader Councillor Tim Crowley said: "We are not smearing him, we are pointing out facts, and the facts are the facts and the truth is the truth.

"We are meant to be public servants and we need to make sure we look squeaky clean and I don’t think this deal looks squeaky clean.

"It is laughable that Tom is accusing us of a smear campaign because all we have done is point out the truth.

"If there is anything that is untrue we would, of course, not have said it because we do not deal in lies."

Ecolocal will pay a rental lump sum of £600,000 for the Carshalton building but, according to council reports, the landmark is worth £1.5m and £1.7m on the open market.

The redevelopment would see nine flats built, as well as offices and community spaces, but Conservative councillors have called for an independent inquiry into the deal and say Sutton Council should develop the flats itself to make money.