Reports – denied by Lady Mone – have suggested the peer may have profited from PPE Medpro winning public contracts worth more than £200 million to supply equipment after she recommended it to ministers in the early days of the pandemic.
The peer, who founded lingerie firm Ultimo, claimed the accusations had been “unjustly” levelled against her.
“With immediate effect, Baroness Mone will be taking a leave of absence from the House of Lords in order to clear her name of the allegations that have been unjustly levelled against her,” a statement released by her office said.
The leave of absence means Lady Mone will not attend sittings of the House, vote on any proceedings and will not be able to claim any allowance.
Labour will present a humble address motion later on Tuesday to force a binding Commons vote to secure the release of documents relating to the contracts.
Tory MPs are not expected to be ordered to oppose the motion, which will require the details of the contracts to be handed to the Commons Public Accounts Committee.
The Lords standards watchdog is investigating Baroness Mone over her alleged involvement in procuring contracts for PPE Medpro, although this has been paused “while the matter is under investigation by the police or another agency as part of a criminal investigation”.
Deputy Labour leader Angela Rayner has demanded a clear timetable for publishing the PPE Medpro documentation and said Rishi Sunak had been “too weak” to remove the whip from Baroness Mone.
“The Tories are all out of excuses,” she said.
“Ministers must now set out clear timelines on when, where and how this information will be released.
“They can’t keep taking the public for fools by refusing to come clean on what they knew about this dodgy deal.
“Rishi Sunak was too weak to remove the whip and has left it to Baroness Mone to finally read the writing on the wall.”
Liberal Democrat deputy leader Daisy Cooper said Rishi Sunak should suspend the whip from Baroness Mone.
“This is more proof if any were needed that Sunak’s pledge of integrity has been reduced to dust,” she said.
“The public will be rightly appalled that we are still hearing allegations about how many of the Tories’ friends were able to cash in on human suffering.
“Sunak needs to suspend the whip for Mone and commit on public record that he will personally ensure that everyone in his party fully complies with any investigation.”
SNP Cabinet Office spokesman Brendan O’Hara said: “The reality is that Baroness Mone should have had the whip removed from her a long time ago while a thorough investigation into her business dealings was carried out.”
A House of Lords spokesman said: “Baroness Mone has indicated she intends to request to take leave of absence from the House of Lords.
“Members request leave of absence by writing to the Clerk of the Parliaments. In doing so they must confirm when they intend to return to the House.
“The Clerk will take a decision once he has received the formal request and after consulting with others as required.”
The Guardian newspaper last week reported that the Tory peer and her children received £29 million originating from profits of the company.
Lady Mone has consistently denied any “role or function” in the company, and her lawyers have previously said she is “not connected to PPE Medpro in any capacity”.
The Government has also come under fire for the use of “VIP lanes”, whereby preferential treatment for public contracts can be given to organisations recommended by MPs and peers.