David Cameron has spent nearly £140,000 buying a patch of land next to his Oxfordshire home.
The Prime Minister made the purchase from his neighbour Lord Chadlington, a close political ally and public relations firm chief executive.
The peer has donated money to the Conservative Party and is the chairman of Mr Cameron's local constituency association.
Downing Street stressed the land had been valued by an independent surveyor before the transaction went through in July.
The £137,500 price tag took account of any potential value added to Mr Cameron's home, according to a Number 10 source. The Cabinet Office was informed, and the premier was advised he did not need to declare the acquisition because there was no conflict of interest.
"It is where his drive is, so he bought it," the source said.
Mr Cameron and his wife Samantha are not recorded by the Land Registry as having taken out a mortgage to make the purchase, the Daily Telegraph reported.
Mr Cameron's official spokesman told a regular daily media briefing: "The Prime Minister handled this issue properly and in accordance with the ministerial code.
"He sought assurances from the Government's head of propriety and ethics in the Cabinet Office and the principal private secretary at Number 10.
"Both advised that, because this was a public transaction and the full market rate had been paid for the land, there was no need to declare it in the list of ministerial interests."