An East Lancashire MP has blasted Tory leadership hopeful Rishi Sunak after a leaked video saw him say he was working to divert funding from “deprived urban areas” towards more prosperous towns

Jake Berry, chairman of the Northern Research Group of Tory MPs, said that in public Mr Sunak “claims he wants to level up the North, but here he boasts about trying to funnel vital investment away from deprived areas”.

The Liz Truss supporter and MP for Rossendale and Darwen added: "He says one thing and does another – from putting up taxes to trying to block funding for our armed forces and now levelling up."

The Tory leadership hopeful told party members that he had started changing public funding formulas to ensure more prosperous towns receive “the funding they deserve”.

The New Statesman magazine, which obtained video footage revealing Mr Sunak’s remarks, said they were made to grassroots Tories in Royal Tunbridge Wells, Kent, on July 29.

The Sunak campaign defended the remarks, arguing he changed the Treasury’s green book setting the rules for government spending to help towns and rural areas also in need of investment.

In the video, Mr Sunak told Tory supporters: “I managed to start changing the funding formulas, to make sure areas like this are getting the funding they deserve because we inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone.

“I started the work of undoing that.”

Speaking ahead of a Tory husting in Eastbourne on Friday evening, the former chancellor defended his comments, saying he was making the point that “deprivation exists right across our country”.

He told Sky News: “I was making the point that deprivation exists right across our country and needs to be addressed.

“That’s why we need to make sure our funding formulas recognise that. And people who need help and extra investment aren’t just limited to big urban areas. You find them in towns across the United Kingdom and in rural areas, too.

“That was the point I was making, that our funding formulas that fail to recognise that are out of date, and they needed changing.”

The remarks from last week came as Mr Sunak tries to make up ground against Foreign Secretary Liz Truss to win the backing of party members who will choose the next prime minister.

Ms Truss declined to say whether her campaign was involved in the leaking of the video when asked about it during a visit to the West Midlands, saying only: “I’m running a positive campaign.”