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Labour politicians have piled the pressure on Baroness Uddin to quit the Lords after it emerged she can return in April despite not having repaid any of the £125,000 she wrongly claimed in expenses.

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The shamed peer was suspended from the Lords a year ago for stating her main home was a flat in Maidstone, Kent when she was living in a housing association-run property in Wapping.

But the Lords said the issues of bans and expenses repayment are “separate” and it has no power to force her to settle her debt or stop her returning.

It is understood Baroness Uddin claims she cannot afford the repayments.

Tower Hamlets politicians have now indicated she should step down.

Jim Fitzpatrick, MP for Poplar and Limehouse said: “Most people would feel to readmit her would be too generous. It would be the honourable thing for her to do to resign.”

Josh Peck, leader of the Labour party said politicians in that position should “check their conscience”.

He added: “The modernisation of the rules governing the House of Lords is long overdue.”

Rushanara Ali, MP for Bethnal Green and Bow said it was a “matter for the parliamentary authorities” but added all politicians have a duty to “restore public trust” in the system.

A further loophole in the rules means not only can Baroness Uddin, of Bethnal Green return next year but she can also claim a tax-free allowance of £300 a day for doing so.

Critics say this means she could repay her debt within three years – with taxpayers’ own money.

The Lords standards and conduct sub-committee recently commented on the disparities in the rules.

The committee said allowing a member to return in these circumstances risks “bringing the House into further disrepute”.

Baroness Uddin denied any wrongdoing at the time of the investigation but the Lords Privileges and Conduct Committee found the claims were made “wrongly and in bad faith”.

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