Labour donor Lord Alli helped out a peer who wrongly claimed £125,000

Lord Alli bailed out a fellow peer who was found to have wrongly claimed £125,000 during the parliamentary expenses scandal, it was reported last night.

The peer gave a £62,000 loan to Baroness Uddin to help her repay the expenses after the Lords watchdog ordered her to refund the taxpayer.

The Times reported that Prime Minister Sir Keir Starmer was head of the Crown Prosecution Service (CPS) at the time, and announced that it would not pursue fraud charges against her.

Baroness Uddin, a community campaigner who former PM Sir Tony Blair made a peer in 1998, wrongly claimed £125,000 in parliamentary expenses in October 2010.

It involved her stating that her main home was in Maidstone when in fact she lived in Tower Hamlets, east London.

The sub-committee on Lords conduct suspended her for about 18 months and ordered her to repay the expenses in full before she would be allowed to return to the Lords.

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Lord Alli provided about half of the money she owed, which helped her to return to the upper chamber, The Sunday Times reported in 2012.

Baroness Uddin is now a crossbench peer in the Lords. Her recent interventions have largely focused on social policy and human rights.

At the time of the CPS prosecution decision on her expenses, Sir Keir said that 'the allegation against Uddin was that she had claimed 'night subsistence' for overnight stays in London, after attendances in the House of Lords, to which she was not entitled'.

He added: 'Although she had nominated a flat she owned in Maidstone, Kent, as her 'only or main residence', it was alleged that her 'only or main residence' was in fact a house in east London.

'Evidence in this case was obtained from neighbours of Baroness Uddin and from companies supplying utility services, such as water, gas and electricity, to the flat in Maidstone.

'But after careful scrutiny of all of the available evidence we have decided that, in applying the definition of 'only or main residence' adopted by the house committee, there is insufficient evidence to bring criminal charges against Baroness Uddin, and we have today advised the Metropolitan Police to take no further action.'

The move not to prosecute Baroness Uddin hinged on a ruling by the Lords clerk allowing peers to nominate their primary home as one they visited at least once a month.

The CPS was unable to find conclusive evidence she had spent less time there, the Times reported.

Sir Keir is understood to have had no contact with Labour MPs or peers during the expenses investigations and didn't become an MP until 2015.

Baroness Uddin was contacted for comment.