David Cameron challenged Gordon Brown on the letter at prime minister's questions
Labour MP Keith Vaz has dismissed suggestions he was offered incentives to vote for the controversial 42-day limit on pre-charge detention.
It follows exchanges between Gordon Brown and David Cameron, over a letter suggesting Mr Vaz may be "appropriately rewarded" for his support.
Mr Vaz is chairman of the home affairs committee, which had previously been sceptical about the case for 42 days.
Both Mr Hoon and Mr Vaz have said the remark had been a "light-hearted" one.
And Mr Vaz has dismissed as "ridiculous" suggestions that he was offered a peerage or a knighthood to vote with the government on the controversial counter-terrorism legislation.
During prime minister's questions, Conservative leader Mr Cameron referred to a handwritten letter published on the Daily Telegraph's website minutes earlier, from Mr Hoon to Mr Vaz.
The letter, dated 12 June - the day after the government narrowly won the vote on extending the limit for holding terrorism suspects without charge - said: "Just a quick note to thank you for all your help during the period leading up to last Wednesday's vote.
Don't take people for fools, tell us the truth, what did he mean?
"I wanted you to know how much I appreciated all your help. I trust that it will be appropriately rewarded."
Mr Cameron asked the prime minister to confirm "that no deals were done, no jobs were offered and no rewards were promised?"
When Mr Brown replied "yes" - Mr Cameron brought up the letter and asked what Mr Hoon had meant by "appropriately rewarded".
'The right thing'
The prime minister explained: "That we thanked the chairman of the Home Affairs committee for doing exactly the right thing and voting with the government."
Mr Cameron said it demonstrated the prime minister's "complete inability to be straight with people" and suggested Mr Hoon, who was also in the Commons, should be "wriggling with embarrassment".
He asked Mr Brown: "Don't take people for fools, tell us the truth, what did he mean?"
It's obvious it was a joke
Geoff Hoon's spokesman
Mr Brown replied: "He meant that he was thanking the chairman of the home affairs committee for doing exactly the right thing."
He began to say "if he has any allegation to make" but was interrupted by Speaker Michael Martin, who brought the exchanges to a halt.
The government won the vote on extending pre-charge detention limits for terrorism suspects by just nine votes.
Mr Vaz, who also denied rumours he had been offered a knighthood during the Commons debate leading up to the vote on terror detention limits, told the BBC the letter was "totally light-hearted" and said that it was totally normal for whips to write to backbenchers after important votes. He said that the row showed that Mr Cameron was "clutching at straws".
A spokesman for Mr Hoon said: "We would deny very strongly the suggestion that he's somehow been given something in return for his vote on 42 days.
"This is a private note between two old friends that included a light-hearted jokey remark. It's obvious it was a joke."
But former shadow home secretary David Davis, who stood down as an MP in protest after the 42 days vote, said it was evidence of "grubby deal-making" and said: "It is now incumbent upon Mr Brown to immediately explain precisely what his chief whip meant."
However Communities Secretary Hazel Blears told the BBC's Daily Politics: "If you look at Keith Vaz's position on the 42 days he was always going to support it - this wasn't a case of, you know, 'if you vote with us, we will offer you this'."
She said the government had moved closer to the suggestions made by the home affairs committee, in "significant changes" made to the Counter-Terrorism Bill.
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