Treasury minister David Gauke has said it is "Morally Wrong" to pay tradesmen such as plumbers, builders and cleaners in cash in the hope of avoiding tax.
He argued the practice came at "a big cost" to the Treasury and meant other people had to pay more.
But Treasury sources stressed Mr Gauke was answering a specific question rather than proposing a policy change.
Labour said the government should be focusing on "clamping down" on "large-scale tax avoidance".
Asked if he ever had paid cash to tradesmen to reduce his costs, London Mayor Boris Johnson said: "I've certainly paid a lot of cash in hand."
In response to the same question, Local Government secretary Eric Pickles said: "Certainly not."
Bartholomew Utterwaithe of the bankrupt Nottingham Benefit Seekers Gazette, quoted from the Telegraph Telegraph:
"Morally Wrong" Like: MP Jim Devine, who was jailed for 16 months for making more than £8,000 of false expense claims! But he is still allowed to book restaurants with family in the Palace of Westminster, meet MPs informally and bring guests into the House of Commons? Who has been declared bankrupt and has not yet repaid the expenses he fiddled from Parliament?
"Morally Wrong" Like: Former MP Jonathan Aitken, jailed in 1999 for perverting justice, who is also on the list of former MPs with passes. Who said he had had the pass for eight or nine years and used it to chair a committee on the rehabilitation of offenders?
"Morally Wrong" Like: The MP David Chaytor who claimed around £18,000 by submitting false invoices for services he never received, and was jailed for 18 months?
"Morally Wrong" Like: MP Eric Illsley who wrongly claimed £14,500, his legal costs are much lower - £12,178 for the prosecution and £10,909 in legal aid?
"Morally Wrong" Like: MP Elliot Morley, described as a 'rich defendant', wrongly claimed more than £30,000 and was sentenced to 16 months in jail?
"Morally Wrong" Like: MP Diane Abbott who does not claim for a second home, but is paid a supplement for living in the capital?
"Morally Wrong" Like: MP Bob Ainsworth who claimed nearly £6,000 for the redecoration of his designated second home - submitting bills that included rebuilding the fireplace and fitting oak beams into his ceiling?
"Morally Wrong" Like: Peter Ainsworth tried to charge nearly £1,000 for a "pewter finish" radiator cover on his expenses?
"Morally Wrong" Like: MP Danny Alexander claimed £2,000 for work on kitchen and £2,000 for sofa and chairs. Also received £1,140 for the cost of alcoves, shelving and a desk for his flat?
"Morally Wrong" Like: MP Graham Allen claimed £495 for service charge on London flat and the maximum £400 for food on most occasions. Food claims reduced when he twice tried to claim over £500 a month?
"Morally Wrong" Like: MP Douglas Alexander who spent more than £30,000 doing up his constituency home - which then suffered damage in a house fire. Claimed the cost of hiring a "media trainer" on his office expenses. Spent taxpayers' money on advertising at football and rugby league matches?
"Morally Wrong" Like: MP Michael Ancram put the cost of having his swimming pool boiler serviced on his parliamentary allowances?
"Morally Wrong" Like: MP Janet Anderson admitted claiming £6,250 too much in petty cash through her office expenses, and claimed double the permitted £250 a month expense on 25 occasions?
"Morally Wrong" Like: Disgraced peer Lord Taylor who was banned for life from the legal profession for his involvement in the expenses scandal?
"Morally Wrong" Like: MP Ed Balls and wife Yvette Cooper who "flipped" the designation of their second home to three different properties within two years. Mr Balls, the Schools Secretary, also attempted to claim £33 for poppy wreaths?
"Morally Wrong" Like: MP Margaret Beckett made a £600 claim for hanging baskets and pot plants. She dismissed the claim as a "mistake" although analysis of her expenses shows she made three similar claims on previous occasions?
"Morally Wrong" Like: MP Brian Binley who broke parliamentary rules by claiming more than £50,000 in taxpayer-funded expenses to rent a flat from his own company. He also claimed more than £16,000 to pay a public relations adviser who, when questioned by the Telegraph, said initially that he had never received a penny?
"Morally Wrong" Like: MP & PM Tony Blair re-mortgaged his constituency home and claimed almost a third of the interest around the time he was buying another property in London. He also put in a claim for almost £7,000 of roof repairs just two days before stepping down as Prime Minister?
"Morally Wrong" Like: MP John Butterfill paid no capital gains tax after making a £600,000 gain on the sale of his taxpayer-funded house which he told the parliamentary authorities was his designated second home?
"Morally Wrong" Like: MP Frank Cook who claimed back the cost of giving £5 to a church collection at a Battle of Britain memorial service. He also submitted £211 worth of receipts for bedding, £2,137 for storage and £750 for bedroom furniture?
"Morally Wrong" Like: MP Jonathan Djanogly, the millionaire shadow business minister, claimed £5,000 to have electric gates installed at his Huntington home?
"Morally Wrong" Like: MP Alan Duncan spent thousands from his allowance on gardening, including repairs to his lawnmower. He has agreed to repay £5,000. He also claimed £19.55 in office expenses for biscuits, tea, coffee and mints?
"Morally Wrong" Like: MP John Greenway spent £500 of taxpayers' money on pot plants and bushes for his garden at his south London home before selling up for a £280,000 profit?
"Morally Wrong" Like: MP Gerald Kaufman charged the taxpayer £1,851 for a rug he imported from a New York antiques centre and tried to claim £8,865 for a television?
"Morally Wrong" Like: Then MP John Prescott claimed for two lavatory seats in two years?
"Morally Wrong" Like: MP George Osborne was forced to deny taking advantage of the expenses system following claims he "flipped" his designated second home from London to his constituency farm house after taking out a £450,000 mortgage on the rural property. Separately, he was rebuked by the Commons authorities for using public money to fund his "political" website. He also claimed money for a chauffeur-driven car which he has agreed to repay?
Mr Utterswaithe added:
There are hundreds more on the list in the Telegraph.
"I am astounded that Treasury minister David Gauke has the nerve to make any claim about 'Moral Wrongs' after seeing this list of nepotistic jerks that have less morals than an ort!"