George Galloway has taken the first steps towards legal proceedings against a national newspaper over its claim he was paid money by the Iraqi regime.
George Galloway (left) with Iraq deputy prime minister Tariq Aziz in 1999
Mr Galloway has strongly denied the allegations in the Daily Telegraph, and on Tuesday evening his solicitors confirmed he would take "whatever legal action as may be necessary" against the paper.
The news came after it was revealed an existing Labour Party inquiry into anti-war comments by Mr Galloway would now be extended to cover the claims the MP received £375,000 a year from the oil for food programme.
The claims relating to the payments spring from Iraqi intelligence documents the Daily Telegraph says it found in Baghdad.
Labour chairman Ian McCartney said the allegations were "extremely serious" but noted Mr Galloway's denial and said he could not comment further.
"The general secretary will consider all these issues arising from this and
will come forward with recommendations to the National Executive Committee," he said.
Mr Galloway dismissed the official Iraqi letter published by the newspaper as a possible forgery or as having been doctored to discredit him.
The Telegraph said the documents suggested Mr Galloway was conducting a relationship with Iraqi intelligence while campaigning for his anti-war charity, the Mariam Appeal.
A confidential memorandum sent to Saddam by his head of intelligence showed Mr Galloway had asked a secret agent for a greater cut of Iraq's exports under the oil-for-food programme, the Telegraph claimed.
The Telegraph said the papers were found by one of their journalists in the foreign ministry in Baghdad.
'No oil deal'
Mr Galloway said it was "preposterous" to suggest his pro-Iraq campaigning activities were funded by the Iraqi dictator.
"I have never solicited nor received money from Iraq for our campaign against war and sanctions," he went on.
"I have never seen a barrel of oil, never owned one, never bought one, never sold one."
He also said he had never, to his knowledge, ever met any Iraqi intelligence officer.
"Given that I have had access over the years to Iraq's political leadership, most often the deputy prime minister Tariq Aziz, I would have absolutely no reason to be meeting with an official of Iraqi intelligence," he continued.
Mr Galloway, who is in Portugal writing a book, said the documents were part of a "smear campaign against those who stood against the illegal and bloody war on Iraq and against its occupation by foreign forces".
It was "highly suspect" for such documents to come to light just days after massive looting in Baghdad, where government buildings had been destroyed, he argued.
The MP said any interests he had in relation to the Mariam Appeal were registered in the House of Commons Register of Members Interests.
The Mariam Appeal, named after an Iraqi child, did not receive any financial help from Iraq for its activities, he added.
Daily Telegraph editor Charles Moore told the BBC he stood by his newspaper's story.
He said: "When you find a document of this sort, what you need
to establish is the prima facie case for its validity, and then you get the
other side of the story, you get the person in question to put his side.
what we have done. I would think that would be perfectly conventional
Mr Moore later said his newspaper had received a letter from Mr Galloway's solicitors.
The solicitors, Davenport Lyons, issued a statement to the press denying all the allegations and saying Mr Galloway would be taking legal action.
"Neither we nor Mr Galloway have yet had an opportunity to examine the
documents referred to in The Daily Telegraph articles," the statement said.
"The allegations are
totally untrue and he has decided to take whatever legal action as may be
Mark Craig, chairman of Mr Galloway's constituency Labour Party, said the local party was sticking by their MP whom he claimed had been "smeared".
Under United Nations sanctions imposed on Iraq after its 1990 invasion of Kuwait, Iraq was allowed - under the oil for food programme - to sell some oil in return for humanitarian supplies.