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Conservative Owen Paterson’s Commons' suspension has been put on hold as MPs vote to review the way their behaviour is policed.
The ex-minister faced a 30 day suspension after a committee found he had misused his position to benefit two companies he worked for.
But allies of the MP said the system was unfair and proposed changing the investigation process.
Their amendment was supported 250 votes to 232.
The government ordered its own MPs to vote for the amendment, but most opposition parties including Labour and the SNP opposed it.
The announcement of the result was met with cries of "shame" from some MPs.
Last month, the Commons Standards Committee recommended Mr Paterson should be suspended from the Commons for 30 days following an investigation by Parliament's standards commissioner, Kathryn Stone.
The report said the former cabinet minister had breached Commons lobbying rules in making approaches to the Food Standards Agency and Department for International Development ministers about Randox and Lynn's Country Foods, which employed him as a paid consultant.
Ahead of the vote, the committee's Labour chairman told MPs Mr Paterson had lobbied ministers "time and again, in a way that conferred a direct benefit on his paying clients".
"That is expressly forbidden. It is a corrupt practice," he added.
He said Mr Paterson was given "every opportunity" to put his case across - and his case was heard "respectfully and fairly".
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