Rishi Sunak has defended his wife after it emerged she holds the tax-reducing non-domiciled status – but who is to blame for the leak appears to depend on the newspaper you read, as a Westminster briefing war was in full swing.

The chancellor said his spouse Akshata Murty – who is estimated to be worth hundreds of millions of pounds – had done nothing wrong in choosing a financial arrangement that means she is not legally obliged to pay tax in Britain on foreign income.

He blamed Labour for the “awful” smears against his family.

Sunak told The Sun newspaper that Murty was entitled to use the so-called “non-dom” arrangement as she is an Indian citizen and plans to move back to her home country to care for her parents.

The fashion-designer daughter of a billionaire married the chancellor in 2009 before he became an MP.

But there were other reports his allies have accused No. 10 of being responsible for the briefings.

The Telegraph reported that unnamed allies of the chancellor claimed the prime minister’s office were behind the leaks – an allegation No 10 and No 11 strongly denied.

A No 10 spokeswoman told the PA news agency: “It is categorically untrue that No 10 is behind the briefings.

“The prime minister and chancellor are united.”

The Times carried briefings claiming Sunak was the victim of a “political hit job” and a “co-ordinated attack”.

“He thinks it’s a total smear,” one ally said. “It feels like there’s a full-time briefing operation against him. This is a hit job, a political hit job. Someone is trying to undermine his credibility.”

A well as weighing up the Labour vs No. 10 claims, the paper revealed Sunak had told only a few people in government about his wife’s tax status – and that included senior officials at his former berth the housing ministry, as well as the Treasury and the Cabinet Office.

Murty is reported to hold a 0.91% stake in Infosys, an IT business founded by her father, with The Guardian reporting that the share is worth £11.5 million per year to Sunak’s wife.

The paper also reportedMurty had potentially avoided up to £20 million in UK tax by being non-domiciled.

With Murty born in India and her father also from the south Asian country, UK government rules allow her to list India, rather than the UK, as her permanent residence, meaning different tax rules on foreign earnings apply.

The chancellor said it was “unpleasant” to read attacks on his wife “especially when she hasn’t done anything wrong”.

“She hasn’t broken any rules. She’s followed the letter of the law,” Sunak told The Sun.

The chancellor said his partner “pays full UK tax on every penny that she earns here in the same way that she pays full international tax on every penny that she earns internationally”.

Asked during the interview whether he thought his family were victims of a “Labour smear campaign”, Sunak said he did.

But Labour hit back, with a party source telling PA: “The chancellor would do better to look a little closer to home.

“It’s clear that No 10 are the ones briefing against Rishi Sunak and, after his failure to tackle the cost-of-living crisis, you can understand why.”