County council leader David Parsons has vowed to clear his name after being embroiled in an expenses row.

He held crunch talks with Conservative councillors yesterday about the issue and his position as leader of the authority – and emerged defiant.

He said: "I shall fight on. My group has given me huge support and I'm determined to defend myself against these allegations.

"I have to show some modesty and accept I haven't been as co-operative with the investigation as I should have been. That will change from now on."

It is alleged that Coun Parsons had held on to more than £5,000 of EU cash he should have used to reimburse another public body for international travel expenses.

It was one of a series of allegations made by an anonymous whistle-blower, who also raised concerns about Coun Parsons's alleged "favours for Asian friends".

Coun Parsons denies all the allegations made against him.

Yesterday, deputy leader Nick Rushton rounded on the source, saying: "Whoever it is appears to be both malicious and racist. They ought to come clean and tell us who they are."

However, he agreed Coun Parsons was wrong to frustrate the investigation by blocking auditors from accessing some of his travel payment records.

"He was pig-headed and he admits that. He has now promised to open up the books and to be as transparent as possible.

"None of the group wants him to resign. Some are less fulsome in their support than others but no-one has called for him to quit."

Party colleagues later queued up to publicly support him.

Lutterworth councillor Rosita Page said: "David has been a very successful leader.

"He's got our full support and he isn't going anywhere."

Melton councillor Pam Posnett said: "Everyone is innocent until proven guilty. It's only right that he has a proper chance to defend himself."

However, Liberal Democrat deputy leader Sarah Hill said: "His continued leadership is a blight on the image of the council and damages its reputation.

"We urge the Conservatives to think long and hard about the future standing of the council."

The allegations relate to Coun Parsons' claims for travelling in his role on the Committee of Regions, which comments on EU policy and legislation.

Fares are covered by the EU but paid in advance by East Midlands Councils (EMC), a publicly-funded body which Coun Parsons chairs.

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

County council internal auditors found at one point £5,400 was owed.

Coun Parsons has since paid the full outstanding amount.

A cross-party panel of councillors looking at the issue this week said it had such "serious concerns" it was referring the matter to the standards committee.

Coun Parsons said: "There are two sides to this story and mine hasn't been heard yet.

"I'm confident the committee will find I have not broken the councillor code of conduct."