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Mark Menzies, 42, quit his post as a Parliamentary private secretary (PPS) following the newspaper’s investigation.
The allegations have been made by a Brazilian male escort.
Eric Ollerenshaw, MP for Lancaster and Fleetwood said: “He has been a good MP for this area and the region.
“I have always found him to be a good colleague.”
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Hide AdIn a statement last night Mr Menzies said: “I have decided to resign as a PPS after a series of allegations were made against me in a Sunday newspaper.
“A number of these allegations are not true and I look forward to setting the record straight in due course.”
Mr Menzies has not resigned his post as MP.
He has been a member of parliament for Fylde since 2010.
FOR THE FULL STORY SEE MONDAY’S PAPER