Tony Blair has been told that the "only way to restore integrity" in Downing Street and his government is to hold a public inquiry into the Peter Foster affair.

At a rowdy session of prime minister's questions, Iain Duncan Smith challenged the prime minister over the "loss of integrity that surrounds the Number 10 press office" over recent days.

Quizzed about the remaining questions concerning the ministerial code and the Foster affair, Blair insisted that "all questions have been properly answered".

Duncan Smith said the cabinet secretary's reply to his own letter had failed to explain how the purchase of two flats through a blind trust did not breach the ministerial code.

"In that letter he says in response 'I do not propose to respond to your invitation to say what advice I gave to the prime minister and when'," said Duncan Smith.

"So there is no information being put in the public domain that will settle this issue.

"I remind the prime minister that he said a few years ago 'we are here to uphold the highest standards' and that his government would be 'whiter than white, purer than pure'.

"After what has happened people simply don't believe what he says. Doesn't he understand the only way to restore integrity to his government and in Number 10 is to hold a public inquiry, why doesn't he do so?"

Blair said that the Home Office and Lords Chancellor's Department have "responded to all the allegations that have been made - all of which I may say have turned out to be false".

Accusing the Tory leader of attempting to make political capital out of a dead story, the prime minister said that it was typical of Duncan Smith that "he dives into the swimming pool just as the water is running out".