Heat half of the olive oil over medium heat in a large frying pan. Fry the chorizo slices until they start to crisp, about 3-4 minutes, then remove and set aside. In the same pan cook the squid rings over medium-high heat for 2 minutes until just cooked. Set aside with the chorizo.
Add the rest of the oil to the pan and cook the onion, garlic, and capsicum over medium heat until softened, about 5-7 minutes. Stir in smoked paprika and chilli flakes, cooking for another minute. Add the tomatoes and water to the pan and season with salt and pepper. Simmer gently for 8-10 minutes.
While the sauce cooks, cook the orzo in a pot of boiling salted water until just tender. Drain well and then toss with lemon zest and Parmesan cheese with a little salt and pepper to taste.
Return the chorizo and squid to the tomato sauce and simmer for a few minutes.
Spoon the orzo onto plates or a serving dish, top with the squid and chorizo mixture, garnish with fresh parsley.
Serve in shallow bowls with leaves alongside.