A senior Labour politician - the party's fiercest critic of tax avoidance - has been accused of hypocrisy after it was claimed she was handed more than £1.5million in shares from a tax haven.

Margaret Hodge has built a reputation for taking on those accused of having 'secretive' offshore funds as the chairman of the Commons public accounts committee.

But The Times reported the multi-millionaire had benefited from a controversial scheme that lets wealthy Britons move undeclared assets back to the UK without facing criminal action.

Chairman of the Commons public accounts committee Margaret Hodge has been a fierce critic of tax avoidance - but has reportedly received more than £1.5m in shares from a tax haven

In 2011 she was apparently one of the beneficiaries of the winding-up of a Liechtenstein trust that held shares in the steel-trading business set up by her father.

Just under 96,000 shares in Stemcor handed to Mrs Hodge in that year came from the tiny principality, which is renowned for low tax rates.

Three-quarters of the shares in the family's Liechtenstein trust had previously been held in Panama, which Mrs Hodge described last month as 'one of the most secretive jurisdictions' with 'the least protection anywhere in the world against money laundering'.

The Labour MP has repeatedly attacked big businesses and bankers who used offshore arrangements, but has not declared that she benefited from an offshore trust, the newspaper said.

Philip Davies, the Tory candidate for Shipley, said: 'It is the sheer hypocrisy we have become used to from Labour politicians.'

But Mrs Hodge said she had ensured that 'any shares I held were above board and that I paid all relevant taxes in full. Every time I received any benefit from the company this happened. '

She has always declared her holding in the parliamentary register of financial interests.

Her share of the £1.5million was around £280,000.

In 2011, Mrs Hodge was apparently one of the beneficiaries of the winding-up of a Liechtenstein trust set up by her father, of which three-quarters of the shares had previously been held in Panama (pictured)

In 2012 it emerged her family business paid just 0.25 per cent in tax on its profits.

Mrs Hodge, a multi-millionaire former Labour minister, has been one of the fiercest critics of tax avoidance by companies such as Starbucks, Google and Amazon.

She faced questions over the limited tax paid by Stemcor, the steel trading company of which she is a shareholder and which was founded by her father and is run by her brother.

She said at the time her own shareholding was 'tiny'.

Analysis of Stemcor's accounts showed that the business paid tax of £163,000 on revenues of more than £2.1billion in 2011.

MailOnline has contacted the Labour MP for comment but Ed Balls said today she had 'paid the appropriate tax' following claims she received shares from a tax haven.

The shadow chancellor said his Labour Party colleague had 'done the right thing' following reports in The Times.

Asked about the report at a Labour campaign event in central London, Mr Balls said: 'On the Margaret Hodge question, these were shares which were transferred by her family out of Germany for the Second World War.

'That is the history of this and Margaret has brought those shares onshore and paid the appropriate tax and I think she's done the right thing. I hope that answers your question, thank you for asking it, it's good to be able to clarify that today.'