Theresa May has refused to sack an aide blamed for outing as gay a whistleblower who claimed the Brexit campaign broke strict spending rules – insisting he “does a very good job”.

The Prime Minister was challenged in the Commons over a statement made by Stephen Parkinson, a senior figure in the Vote Leave campaign, about Shahmir Sanni.

In response, Ms May acknowledged that being outed could be “difficult” for some gay people “because of their family and circumstances”.

But, on the future of Mr Parkinson – now her political secretary – she insisted: “Any statements issued were personal statements.”

Two Labour MPs demanded tough action against Mr Parkinson, with one, Angela Eagle, telling the Prime Minister: “Sack him”. Ben Bradshaw, another former minister, asked how Mr Parkinson’s actions could be “remotely acceptable”, adding: “It is a disgrace. Do something.”

At the weekend, Mr Sanni claimed that Vote Leave used its links with another pro-Brexit group to get around the £7m spending limit imposed by the Electoral Commission in a way that was “totally illegal”.

Responding to the allegations, Mr Parkinson revealed that he had been in a relationship with Mr Sanni – the first time his sexuality had been revealed, Mr Sanni's lawyers then stated.

The biggest issues facing UK on leaving EU Show all 8 1 /8 The biggest issues facing UK on leaving EU The biggest issues facing UK on leaving EU Post-Brexit immigration workers sorting radishes on a production line at a farm in Norfolk. One possible post-Brexit immigration scheme could struggle to channel workers towards less attractive roles - while another may heighten the risk of labour exploitation, a new report warns. PA The biggest issues facing UK on leaving EU Customs union A key point in the negotiations remains Britain's access to, or withdrawal from, the EU customs union. Since the referendum there has been hot debate over the meaning of Brexit: would it entail a full withdrawal from the existing agreement, known as hard Brexit, or the soft version in which we would remain part of a common customs area for most goods, as Turkey does? No 10 has so far insisted that “Brexit means Brexit” and that Britain will be leaving the customs union, but may be inclined to change its position once the potential risks to the UK’s economic outlook become clearer. Alamy The biggest issues facing UK on leaving EU Northern Ireland-Irish border Though progress was made last year, there has still been no solid agreement on whether there should be a hard border between Northern Ireland and the Republic of Ireland. To ensure borderless travel on the island, the countries must be in regulatory alignment and therefore adhere to the same rules as the customs union. In December, the Conservative Party’s coalition partners, the DUP, refused a draft agreement that would place the UK/EU border in the Irish Sea due to its potential to undermine the union. May has promised that would not be the case and has suggested that a “specific solution” would need to be found. Getty The biggest issues facing UK on leaving EU Transition period Despite protests from a small number of Conservative MPs, the Government and the EU are largely in agreement that a transitional period is needed after Brexit. The talks, however, have reached an impasse. Though May has agreed that the UK will continue to contribute to the EU budget until 2021, the PM wants to be able to select which laws made during this time the UK will have to adhere to. Chief negotiator Michel Barnier has said the UK must adopt all of the laws passed during the transition, without any input from British ministers or MEPs. EPA The biggest issues facing UK on leaving EU Rights of EU citizens living the UK The Prime Minister has promised EU citizens already living in the UK the right to live and work here after Brexit, but the rights of those who arrive after Brexit day remains unclear. May insists that those who arrive during the transition period should not be allowed to stay, whereas the EU believe the cut-off point should be later. Getty The biggest issues facing UK on leaving EU Future trade agreement (with the EU) Despite this being a key issue in negotiations, the Government has yet to lay out exactly what it wants from a trade deal with the EU. Infighting within the Cabinet has prevented a solid position from being reached, with some MPs content that "no deal is better than a bad deal" while others rally behind single market access. The EU has already confirmed that access to the single market would be impossible without the UK remaining in the customs union. Getty The biggest issues facing UK on leaving EU Future trade agreements (internationally) The Government has already begun trying to woo foreign leaders into prospective trade agreements, with various high profile state visits to China, India and Canada for May, and the now infamous invitation to US President Donald Trump to visit London. However the UK cannot make trade agreements with another country while it is still a member of the EU, and the potential loss of trade with the world's major powers is a source of anxiety for the PM. The EU has said the UK cannot secure trade deals during the transition period. EPA The biggest issues facing UK on leaving EU Financial services Banks in the UK will be hit hard regardless of the Brexit outcome. The EU has refused to give British banks passporting rights to trade within the EU, dashing hopes of a special City deal. However according to new reports Germany has suggested allowing trade on the condition that the UK continues paying into the EU budget even after the transition period. Getty

Chris Wylie, the Cambridge Analytica whistleblower who disclosed the Facebook data breach, said Mr Parkinson’s actions had put Mr Sanni's family in Pakistan in danger, forcing them to take measures for their own security.

“He was forced to come out to his mum in the middle of the night because No 10 decided it was appropriate to out somebody,” Mr Wylie told BBC Radio 4's Today programme.

Challenged in the Commons, Ms May said: “I of course recognise the importance of ensuring that we do recognise, for some, being outed as gay is difficult because of their family and circumstances

“What I want to see is a world where everybody is able to be confident in their sexuality and doesn’t have to worry about such things.”

When urged by Ms Eagle to dismiss her political secretary, she replied: “No, I’m sorry that is not what I should be doing. My political secretary does a very good job as my political secretary. And, as I have said, any statements that were made were personal statements.”

At the weekend, Mr Parkinson said he was “saddened” by the “factually incorrect and misleading” statements by Mr Sanni and his lawyers.

He said: “I cannot see how our relationship, which was ongoing at the time of the referendum and which is a material fact in the allegations being made, could have remained private once Shahmir decided to publicise his false claims in this way.”

In his response to the statement, Jeremy Corbyn has accused the Government of turning “wild claims and red lines” into “climbdowns and broken promises” in the Brexit talks.

“The Government wasted months and months dithering and posturing before accepting the inevitable,” said the Labour leader.

Ms May insisted the transition agreement reached with the EU at last week's summit represented significant progress, telling MPs: “It is not in our national interest to ask businesses to undertake two sets of changes.

“Whilst I recognise that not everyone will welcome the continuation of current trading terms for another 21 months, such an implementation period has been widely welcomed by British business because it is necessary if we are to minimise uncertainty and deliver a smooth and successful Brexit.”