George Galloway has branded claims he took £375,000 from Iraq's former regime "outrageous", on the first day of his libel case against the Daily Telegraph.
Mr Galloway strenuously denies claims made in the Daily Telegraph.
The MP told the High Court in London the accusations had been "extremely damaging" to his reputation.
His QC said the paper had portrayed Mr Galloway as a "greedy crook" without asking him about key claims.
The newspaper is standing by its right to publish the story, which it says was based on indisputably genuine papers.
The case has taken more than a year to come to court.
An American publication, The Christian Science Monitor, also made claims about Mr Galloway receiving money but has since paid him damages and apologised, saying the documents it relied on were false.
The Daily Telegraph says it acted responsibly in publishing documents its reporter found in Baghdad, which it says were in the public interest.
As he began his testimony, Mr Galloway denied ever seeking or receiving money from Saddam Hussein's government, which he says he had long opposed.
"It is hard to stomach the fact that the Telegraph can make the grave and outrageous allegations it has about me and yet it is not prepared to say that they are true," he said.
The MP did not accept the newspaper had acted responsibly in publishing the claims.
He said the allegations were "a dagger, a sword, right through my political heart".
The Telegraph story emerged after reporter David Blair found files, including a document referring to Mr Galloway, inside the remains of the Iraqi foreign ministry in Baghdad.
Mr Galloway argued the documents were fake.
His QC, Richard Rampton said Mr Blair had found a letter about the MP's work on the Mariam appeal, named after a sick Iraqi girl.
Two days later, Telegraph political reporter Andrew Sparrow had spoken to Mr Galloway for 35 minutes about whether the appeal had received funding from the Iraqi regime - something the MP denied.
Mr Galloway "smelt a rat" but had not been told the paper was planning a story under the headline "Galloway was in Saddam's pay say secret Iraqi documents", said the QC.
And he had not been asked about the newspaper's references to his "cut", "share" and "percentage".
"He had no inkling that instead of an allegation, which he had denied - that
the Mariam campaign was receiving funds for the sake of the Iraqi people from
the Iraqi regime - there was going to be a naked accusation that he had been
acting as the paid agent, the bribed servant of Saddam Hussein."
Mr Rampton said the two claims were of completely different calibre.
He added: "We are in court today because every single word that matters of
what they published is untrue. Every single word.
"Mr Galloway never had a penny of Saddam Hussein's money for himself - nor,
as it happens, did the Mariam campaign."
For the newspaper, James Price QC the Iraq war had been a hugely important issue at the time and the public had every right to be told of the unearthed documents.
He said the Telegraph believed the documents were genuine and should be investigated.
"Mr Galloway's problem is that these documents came to
light and were published," he said.
"It is, in our submission, frivolous of Mr Galloway to pretend now that the
injury to his reputation that he complains about arises from the way in which
the Daily Telegraph presented the documents and not from the documents
"This is, we say, absurd. The Daily Telegraph published each one of the key
documents in full."
Mr Justice Eady is hearing the case without a jury. It is expected to last about five days.