The former Conservative MP Mark Menzies is quitting the party and parliament after an internal inquiry found a “pattern of behaviour” that had fallen below the standard expected of MPs. The MP for Fylde announced that he would not stand at the next election after the allegations that he misused campaign funds were referred to Lancashire police. The Tory party said the internal investigation had not found any misuse of party funds and that the evidence it seen had shown all donations had been properly declared to the Electoral Commission and parliamentary authorities. However, its inquiry into the allegations, which Menzies denies, found the MP’s behaviour had fallen below the standards required of any individual responsible for local campaign funds and may have breached the Nolan principles of public life. Labour had accused the Tories of “sitting on their hands” for more than three months after the claims first emerged, while the Liberal Democrats called for the prime minister’s independent adviser on ministers’ interests to investigate the handling of the row. A Conservative spokesperson said it was “demonstrably false” to suggest the party had not been “seriously examining” the matter. The party has only investigated the possible misuse of Conservative party funds. The MP resigned the Tory whip and was suspended as a government trade envoy after the Times published allegations he had used political donations to cover medical expenses and pay off “bad people” who had locked him in a flat and demanded thousands of pounds for his release. Menzies’ former campaign manager, who allegedly received a late-night phone call from him asking for cash, has said she felt “let down” by the party after she raised concerns with the chief whip, Simon Hart, in January. In a statement, Menzies said: “It has been an enormous privilege representing the people of Fylde since 2010, but due to the pressures on myself and my elderly mother, I have decided to resign from the Conservative party and will not stand at the forthcoming general election. “This has been a very difficult week for me and I request that my family’s privacy is respected.” Menzies has a majority of more than 16,000 in his seat, which the Tories have always held but which, with Labour about 20 points ahead in the national polls, could for the first time be in contention. Rishi Sunak declined to say on Friday whether Menzies should quit as MP for Fylde, although he told reporters after a speech in London on Friday that it was “right” that he had resigned the whip. A Conservative party spokesperson said: “The money in question that was sent to Mark Menzies MP was signed off by the two signatories of Fylde Westminster Group. This body sits outside the remit of both the Conservative party and Fylde Conservative Association. Therefore we cannot conclude that there has been a misuse of Conservative party funds. “However, we do believe that there has been a pattern of behaviour that falls below the standards expected of MPs and individuals looking after donations to local campaign funds which lie outside the direct jurisdiction of the Conservative party. “We will therefore be commencing with retraining individuals across the party on how to manage these accounts which fall outside the remit of the Conservative party and are introducing a whistleblowing helpline. “Furthermore, while outside the initial scope of this investigation, there has also been a recommendation that the actions of the MP in question have also potentially breached the Nolan principles of public life. “This is due to the nature of the allegations made, but also the repetitive nature of these separate allegations. These will be reviewed by the Conservative party’s member governance team. “We will of course share any information with the police if they believe it would be helpful to any investigation they decide to undertake.” On Sunday evening the chair of the Labour party, Anneliese Dodds, said Menzies “did the right thing” in deciding to leave parliament but that “serious questions remain for Rishi Sunak and the Conservative party”. She said: “The fact that Conservatives have not even approached the whistleblowers in the case, weeks after saying they were going to, despite now saying the investigation has been completed, says everything about how seriously they are dealing with these allegations. “The Conservative chairman and chief whip need to immediately come out of hiding and explain what action they have taken to deal with these shocking allegations.”