County council leader David Parsons has potentially broken the councillor code of conduct, a panel has said.

The County Hall politician was referred to the authority's standards watchdog earlier this month over alleged expenses irregularities.

A panel of councillors set up to consider the allegations has decided to refer the case to the authority's monitoring officer for investigation.

It said three parts of the councillor code of conduct may have been breached – including bringing the office of councillor into disrepute.

A notice released by the committee said: "If proven, the allegations would likely be a breach of the code of conduct."

The findings of the investigation will eventually go before the full standards committee.

If Councillor Parsons is found to have broken the code of conduct, he could face censure ranging from a written warning to suspension.

The inquiry came after a whistle-blower alleged Coun Parsons had held on to EU cash he should have used to reimburse another body for travel expenses.

Train or air fares are covered by the EU, but paid for in advance by East Midlands Councils (EMC), a publicly-funded body representing the interests of local councils.

Coun Parsons then has to claim the money from the EU before returning it to the EMC.

Council auditors found Coun Parsons had left the EMC – therefore taxpayers – "thousands of pounds out of pocket", because some expenses had not been paid back. Their investigation found, at one point, £5,400 was owed.

Coun Parsons has since paid back the outstanding amount, and says the delay was because the EU had not reimbursed expenses in time.