Boris Johnson has denied burning a £50 note in front of homeless people.
Labour's Helen Goodman made the allegation against the Prime Minister on Wednesday evening, claiming it related to his student days.
But Mr Johnson - who was forced to return to Westminster after the Supreme Court ruled his prorogation of Parliament as unlawful - vehemently disputed the accusation, saying it was "completely untrue".
Speaking in the Commons, Ms Goodman said: "I must say, I feel that the Prime Minister's goading of my colleagues from Yorkshire reveals that he has changed little since he was a student burning £50 notes in front of homeless people."
In response, Mr Johnson said: "Mr Speaker, the right honourable lady opposite has made an allegation about my conduct as a student which I'm afraid, if it were allowed to stand, would enter the record.
"She has no evidence or whatever because it is completely untrue and I would like you to ask the right honourable lady to withdraw it."
Speaker John Bercow said: "The honourable lady has said what she's said, but the Prime Minister from the despatch box and with the full authority of his office and knowing his own background and recognising the duty of every member to speak the truth in the chamber, has exercised his freedom, and quite rightly so.
"The Prime Minister, I think, would rightly acknowledge that in the light of all that, he doesn't require any additional protections from me.
"He has put the record straight and it's there, it's on the record."
