Communities Secretary Robert Jenrick has said he and a junior minister approved payments to towns in each other’s constituencies from a Government fund earmarked for deprived areas.

Mr Jenrick confirmed that Communities Minister Jake Berry gave the go-ahead for his Newark constituency to be selected for a £25 million fund award, whilst he signed off the decision for money to be allocated to a town in Mr Berry’s Rossendale and Darwen constituency.

The revelations follow a report in The Times alleging Mr Jenrick helped select Newark for the allocation, something the Communities Secretary has vehemently denied.

On Sunday, Mr Jenrick insisted there was a “robust and fair” methodology behind the Government’s Towns Fund and dismissed allegations that he had any involvement in Newark’s selection as “completely baseless”.

But Labour has demanded a top-level investigation into Mr Jenrick over how Government funding was allocated to his constituency over others in the UK.

Shadow communities secretary Steve Reed has written to the head of the civil service requesting a Cabinet Office investigation into Mr Jenrick, concerning how recipients of the multibillion-pound Towns Fund were decided.

Mr Jenrick told Sky’s Ridge on Sunday: “My department’s officials have been very clear that we chose the towns for our £3.6 billion Towns Fund on a robust and fair methodology that is there for everybody to see.”

Asked if he would face MPs in the Commons on Monday to defend the situation, he added: “We’ve answered all the questions and (are) happy to answer any more that might arise. But there really is nothing to see here.”

But later, the Communities Secretary could not deny that he and Mr Berry had approved towns in each other’s constituencies to receive allocations of Government funding.

Mr Jenrick told the BBC’s Andrew Marr Show: “If the question you’re coming to is was I involved in selecting my own community, absolutely not.

“Ministers do not get involved in their own constituencies. That decision was made by another minister in my department.”

Asked which minister made the decision, Mr Jenrick replied: “It was made by Jake Berry.”

When pointed out that a town in Mr Berry’s constituency also received money from the fund, Mr Jenrick confirmed that he was the individual to have given that decision the go-ahead.

Mr Jenrick said: “Well that was a decision made by another minister.”

Asked who made the decision, Mr Jenrick added: “Well it was made by myself…”

He continued: “Andrew (Marr), with respect, this is perfectly normal. Ministers do not get involved in making decisions for their own constituencies, but neither should their constituencies be victims of the fact that they happen to be (represented by) a minister.

“This has been set out very clearly by the NAO (National Audit Office).”

Earlier this year Mr Jenrick rebuffed calls for his resignation after he ensured a controversial housing development was agreed before a new levy was introduced which would have cost millions for its backer.

Documents released after pressure from Labour showed multimillionaire Conservative Party donor Richard Desmond urged Mr Jenrick to approve his Westferry Printworks development in east London before a new community infrastructure levy was introduced which, it is believed, would have saved Mr Desmond £50 million.

Mr Jenrick faced accusations of “cash for favours” after it emerged that Mr Desmond had given the Conservatives £12,000 two weeks after the scheme for 1,500 homes was approved, and that the Housing Secretary had sat next to him and viewed a video at a fundraising event.

Mr Reed said: “Mr Jenrick has made an unfortunate habit of overruling officials’ advice to get his own way, just as he did during the Westferry cash-for-favours scandal.

“Now he has done the same with this blatant example of pork-barrel politics, with public money making its way to help his own re-election campaign.

“Misuse of public funds is a very serious abuse of public trust.

“Robert Jenrick must come to the House urgently to make a statement on how this money was awarded and submit himself to a full Cabinet Office investigation.”

Shadow work and pensions secretary Jonathan Reynolds added: “The secretary of state has questions to answer and an investigation is the right way forwards.”