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Baroness Uddin was told today to repay £125,000 she wrongly claimed as expenses and been banned until 2012.
The peer was found guilty after a sleaze inquiry into her expenses for a Maidstone flat.
She was one of three peers told by the House of Lords Privileges and conduct Committee to repay expenses.
An investigation found Baroness Uddin alone wrongly claimed £125,349.10.
But the matter was not a disciplinary one, so the committee recommended the Clerk of the Parliaments consider how the money could be recovered.
That ruling was today.
The committee recommended Baroness Uddin be suspended until the end of the current session of Parliament, which is up to Easter 2012.
It had heard the peer bought the house in 2005, claiming it was her main residence.
She then claimed night subsistence for time spent away from Maidstone every week when the House was sitting.
Lady Uddin also claimed mileage allowance for journeys to and from Maidstone every weekend when the House was sitting.
However, the committee found "several inconsistencies and contradictions within her evidence at different times."
It found there was little evidence of Lady Uddin using the house as a main home - until after finding out about a Sunday Times investigation.
The committee's findings follow a controversial decision not to bring charges against Baroness Uddin following an investigation into her parliamentary claims involving the flat in Wat Tyler Road.