Home Secretary James Cleverly has denied an allegation that he described Stockton North using an offensive term.
Labour MP Alex Cunningham alleged the swear word was used during Prime Minister’s Questions on Wednesday.
Mr Cunningham said it happened after he challenged the Prime Minister about child poverty in the constituency.
Mr Cleverly’s spokesman said: “He did not say that, and would not. He’s disappointed people would accuse him of doing so.”
Speaking at Prime Minister’s Questions, Mr Cunningham had asked: “Why are 34% of children in my constituency living in poverty?”
Making a point of order in the Commons later on Wednesday, Mr Cunningham said: “Before the prime minister answered, the home secretary chose to add in his pennyworth.”
‘Audio is clear’
“Yes, I have contacted his office advising him I planned to name him, but sadly he has chosen not to be in the chamber,” he continued.
“He was seen and heard to say ‘because it’s a shithole’.
“I know he is denying being the culprit, but the audio is clear and has been checked, and checked, and checked again.”
“There is no doubt that these comments shame the home secretary, this rotten government, and the Tory Party. He is clearly unfit for his high office,” Mr Cunningham added.
It is unclear where the remarks come from in footage of the exchange in the Commons, as there is no shot of Mr Cleverly mouthing the words.
Mr Cunningham asked how he could secure an apology from the home secretary for “his appalling insult and foul language” about his seat in the North East.
Commons Deputy Speaker Dame Eleanor Laing said it was her understanding that Commons Speaker Sir Lindsay Hoyle “didn’t hear any remark of the kind from the chair at the time when the honourable gentleman was asking his question”.
She said: “I understand that the alleged words were not actually used, though I appreciate what (Mr Cunningham) says.
“But I think we all know that it’s very difficult in the noisy atmosphere of Prime Minister’s Questions to discern exactly what someone says.
“So I can make no judgment here from the chair as to what was or wasn’t said.”
Responding at the despatch box, Rishi Sunak said: “It’s this government that has ensured that across our country 1.7 million fewer people are living in… poverty as a result of the actions of this government.”
Mr Cunningham could then be heard calling out “it’s not true” to the prime minister.
Mr Sunak went on: “Yes that is true. Not only that, hundreds of thousands fewer children are living in poverty, and income inequality is at a lower level than we inherited from the party opposite.”
Chris McDonald, Labour’s new candidate for Stockton North, said in a statement: “This is a disgrace, but it lays bare what the Tories’ view of Teesside is.”
The Local Democracy Reporting Service said Mr McDonald had called on Conservative councillor for Stockton North, Niall Innes, to “condemn the remarks made”.
Mr Cunningham has chosen not to stand at the next election, so Mr McDonald will stand for Labour in the constituency.