Angela Rayner is facing a police investigation over the sale of a house in 2015.
Greater Manchester Police previously said the Deputy Labour leader would not face an investigation over the allegations, which include claims she broke electoral law. But following lobbying by Tory MP James Daly, the force said it would look into it.
A GMP spokesman said: "We're investigating whether any offences have been committed. This follows a reassessment of the information provided to us by Mr Daly."
A Labour spokeswoman said: “Angela welcomes the chance to set out the facts with the police. We remain completely confident that Angela has complied with the rules at all times and it’s now appropriate to let the police do its work.”
Asked about the police's decision to look into whether to reinvestigate at the end of March, Ms Rayner told the Mirror: "I haven't had a chance to look at it but my comments haven't changed - I've done nothing wrong and my comments are exactly as they were."
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In an unauthorised biography by ex-Tory peer Lord Ashcroft, neighbours claimed she had been living at her husband Mark Rayner's house despite Ms Rayner remaining registered on the electoral roll at her former council house a mile down the road. Critics demanded she be investigated for breaking electoral law as they claimed she had provided false information about where she was living.
Tory MPs have also asked Ms Rayner explain why she did not pay capital gains tax of up to £1,500 on her former council house in Stockport when she sold it in 2015. Capital gains tax must be paid on any profit made from the sale of a second home.
Mr Daly alleged that GMP had failed to properly investigate claims she may have broken electoral law.
Ms Rayner insists the former council house was her home and she “lived there, paid the bills there and was registered to vote there”. She told BBC Newsnight there had been “no wrongdoing” and “no unlawfulness”, adding: “I’ve been very clear there’s no rules broken. They [the Tories] tried to manufacture a police investigation … I got tax advice which says there was no capital gains tax. It’s a non-story manufactured to try and smear me.”
Keir Starmer said the police investigation into Ms Rayner's council house sale will allow a "line to be drawn" on the issue. "We welcome this investigation because it will allow a line to be drawn in relation to this matter," the Labour leader said. "I am fully confident that Angela Rayner has not broken the rules. She will cooperate with the investigation as you would expect and it is really a matter for the police."
London Mayor Sadiq Khan said he is fully confident that his "best friend" Ms Rayner will be cleared. "I fully support Angela Rayner, I'm confident that she'll be vindicated in relation to the police investigation," he said. "Of course there's an investigation now which gives Angela a chance to explain to the police what went on." Mr Khan added: "I'm fully confident in Angela, she's one of my best friends and I'm sure she'll be cleared."
Shadow Energy Minister Ed Miliband said as he stood behind Labour's deputy leader following the launch of the investigation. "We are absolutely 100% behind Angela. We are absolutely confident that she has complied with the rules. She welcomes the fact she can set out the facts."
"My message to the country is we are incredibly proud of Angela Rayner, our deputy leader. She is an inspiring person, she is exactly the kind of person we need in politics," he continued. "If a Labour government is elected, I look forward to Angela Rayner serving as deputy prime minister. Frankly the Conservative party is a desperate party that has nothing to say to the country about the big issues that it faces. "
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