Shamed former Tory Patrick Mercer inflicted significant reputational damage on the House of Commons by evading strict lobbying rules, smearing MPs and using racial slurs, according to a watchdog.

The cash-for-questions scandal that led to Mr Mercer quitting Parliament was the worst breach of transparency regulations by a sitting MP the Standards Committee has dealt with, it said in a report yesterday.

Mr Mercer, a former shadow minister, referred himself to the Parliamentary Commissioner for Standards, Kathryn Hudson, when allegations that he had tabled Commons questions and offered a Westminster security pass after signing a deal that paid him £4000 emerged last year.

The investigation found he had signed an agreement to provide consultancy services but failed to register it or declare his interest when tabling relevant parliamentary questions and had been "willing to use his parliamentary position for his own gain".