Patrick Mercer resigned the Tory party's whip after claims by the BBC's Panorama programme that he broke Parliament's lobbying rules.
It is alleged he accepted 4,000 pounds to lobby for business interests in Fiji. Mercer said he was taking legal advice and had referred himself to Parliament's standards commissioner.
The Newark MP said he took the money for consultancy work outside parliament. He added he would not be standing at the next general election.
Panorama said Mercer had been approached by a fake company set up by the programme, in conjunction with the Daily Telegraph.
The country's membership was suspended in 2009 amid criticism of its human rights' record and lack of democracy.
A clip of Mercer being filmed undercover has been released by Panorama.
It shows the MP meeting with an undercover reporter, who was posing as a representative of the fake company.
Mercer can be heard saying, "I do not charge a great deal of money for these things. I would normally come out at 500 pounds per half day, so 1,000 pounds a day."
Panorama said it had paid Mercer 4,000 pounds for working two days a month at a rate of 2,000 pounds per month, but that the money had yet to be declared to the parliamentary authorities.
In a statement the programme said: "Patrick Mercer MP said he agreed to be a consultant for work he said was outside parliament.
Under parliamentary rules, politicians are required to declare publicly money that they receive beyond their parliamentary salary, but some paid work should not be undertaken at all.
For example, MPs should not be paid "to ask a parliamentary question, table a motion, introduce a bill, table an amendment to a motion or a bill, or urge colleagues or ministers to do so".
"I am taking legal advice about these allegations - and I have referred myself to the Parliamentary Commissioner for Standards.
"In the meantime, to save my party embarrassment, I have resigned the Conservative whip and have so informed [Conservative Chief Whip] Sir George Young.
"I have also decided not to stand at the next general election."
MPs who resign the whip can continue to sit in the Commons as independents but are no longer members of the parliamentary party.
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