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Mr Paterson stepped down on Thursday amid a debacle which saw the UK Government forced to U-turn following an attempt to overhaul the complaints procedure to save the former cabinet minister from a 30-day suspension.
He had been found guilty by standards authorities of breaching Commons rules by lobbying officials and ministers for two companies paying him more than £100,000 a year.
It would be grotesque and deeply offensive
The Prime Minister’s official spokesman on Friday refused to rule out Mr Paterson being appointed to the House of Lords.
Speaking to journalists at Cop26, Scotland’s First Minister – who called the attempts to save Mr Paterson from suspension “classic corruption” – said: “It would be grotesque and deeply offensive that somebody who had been found to breach standards by an independent process of investigation, who ended up resigning from the Commons albeit through a messy process, ended up being put back into politics through the House of Lords.
“But I say that as someone who is opposed to unelected peers sitting in the House of Lords.”