Communities Secretary Robert Jenrick has dismissed Labour’s call for an investigation into the award of a £25m regeneration grant to his constituency.
He told BBC One’s Andrew Marr show the decision to give the money to Newark, Nottinghamshire, had been taken by fellow minister Jake Berry.
This was “perfectly normal”, Mr Jenrick added, accusing Labour of manufacturing a “distraction”.
But Labour said the question of how the money had been allocated was “murky”.
The £25m was awarded to Newark under the Ministry of Housing, Communities and Local Government’s £3.6bn Towns Fund, set up last year to help places that had “not always benefitted from economic growth in the same way as more prosperous areas”.
Newark and Sherwood District Council submitted its town investment plan – including better transport, training and digital connectivity – in July.
Mr Jenrick, Conservative MP for Newark since 2014, supported the bid.
For Labour, shadow work and pensions secretary Jonathan Reynolds told Sky News’s Ridge on Sunday: “The whole question has always been quite a murky one as to how this money was allocated.
“The secretary of state has questions to answer and an investigation is the right way forwards.”
But Mr Jenrick said the government had a “robust” system in place for choosing which places would benefit from the Towns Fund and that the rules had been created before he became communities secretary.
He added that Mr Berry, who oversees local growth in England as a minister within Mr Jenrick’s department, had made the decision following advice from civil servants.
Mr Jenrick said: “This is perfectly normal. Ministers don’t get involved in making decisions for their own constituency.
“But neither should their constituencies be victims of the fact that their MP is a minister.”
He also said: “The Labour Party front bench need to get beyond the M25 and see what’s happening in our constituencies.”
Earlier, he told Sky News that Labour’s accusations were “completely baseless”.
But, following the interviews, shadow communities secretary Steve Reed insisted that, if “Robert Jenrick has nothing to hide, he should submit himself to a full investigation”.
In August, Mr Jenrick said he regretted sitting next to property developer Richard Desmond at a Conservative Party fundraising event last year.
Mr Desmond donated £12,000 to the Conservatives in January, 12 days after the minister overruled government planning inspectors to approve a development at the former Westferry print works in east London.
Labour said this had raised suggestions of “cash for favours”.
But Mr Jenrick has always insisted he had no knowledge of the donation and was motivated by a desire to see more homes built.