Prime Minister David Cameron has rejected a call for Take That member Gary Barlow to hand back his OBE, following claims that the singer and his fellow bandmates Howard Donald and Mark Owen took part in a tax avoidance scheme.

Labour's Margaret Hodge, chair of the Public Accounts Committee, said Mr Barlow - who has previously been seen on the campaign trail with Mr Cameron - “might want to show a bit of contrition by giving back his OBE”.

But during an interview with ITV’s Good Morning Britain, Mr Cameron said that while the men should pay the money they owe, removing Mr Barlow’s honour was not necessary.

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“Gary Barlow has done a huge amount for the country, he has raised money for charity, he has done very well for Children in Need, so I'm not sure. The OBE is in respect of that work and what he has done.”

43-year-old Mr Barlow was given the award by the Queen in November 2012 for services to the entertainment industry and to charity. He also curated the Queen’s Diamond Jubilee concert, staged at the palace in 2012.

The Prime Minister went on to condemn “aggressive” tax avoidance schemes, mirroring comments he made to The Times, while highlighting the difference between “avoidance” and “evasion.”

"I think we should be very clear, tax evasion is illegal, and for that, you can be prosecuted, you can go to prison for tax evasion.

"Tax avoidance is, in these cases, these very aggressive tax avoidance schemes, they are wrong, and we should really persuade people not to do them.

"That is why we have these court cases where the court looks at whether a scheme is really about avoiding tax rather than anything else. The court was very clear in this case."

Over the weekend, the three band members refused to comment on reports that they will be made to pay tens of millions of pounds in tax.

The singers and their manager, Jonathan Wild, invested £66 million into two partnerships styled as music industry investment schemes, according to reports.

HM Revenue and Customs is now expected to demand a repayment, after a court ruled on Friday that 51 partnerships set up by Icebreaker Management were to secure tax relief for members.

In a statement issued at the time, Take That's lawyers insisted the bandmates believed the investments were legitimate enterprises and that all four named paid ”significant tax“.

Additional reporting by PA