Comedian Jimmy Carr's tax arrangements have been branded "morally wrong" by the Prime Minsiter.

David Cameron made the comment to ITV News after Carr broke his silence over the controversy, saying: "I pay what I have to and not a penny more."

The 8 out of 10 Cats presenter is said to have used an aggressive - but legal - tax-avoidance scheme which allows members to pay income tax rates as low as one per cent.

Carr reportedly protects some £3.3 million a year by channelling cash through Jersey-based company K2, which then returns the money in the form of a loan. This is not subject to income tax.