A report yesterday from government auditors cleared him of any impropriety in the sale of Hull Housing Action Trust houses to a company which employed the Deputy Prime Minister's son, Jonathan Prescott.
Mr Prescott launched his outspoken attack on Rupert Murdoch's Sunday Times - the paper that carried allegations last weekend that he had failed to declare a pounds 27,750 donation from the Joseph Rowntree Reform Trust, and a report headlined: "Prescott's son may cash in as council homes go cheap."
In an attack that might well displease No 10 - which has been cultivating Mr Murdoch and his empire - Mr Prescott accused the newspaper of running a politically-motivated campaign to smear him, fuelled by a man who had been "planted" in his Hull East constituency party.
He told The Independent that the undercover reporter was Simon Trump, who had switched membership of the Bristol West Labour Party to Hull East in August 1996. Martin Ivens, the paper's deputy editor, last night confirmed that Mr Trump had been sent up to Hull "to get stories", having previously worked for the paper in the West Country.
"The Sunday Times role, both in the incident for myself and East Hull," Mr Prescott said, "has been one that has had more political content and motivation than that of journalists trying to find out what is wrong. It's a kind of, almost agent provocateur role."
The investigation into Mr Prescott was launched by the newspaper more than 12 months ago and was referred to inside its Wapping offices as Project X.
Neighbours at the three-storey Victorian house that Trump described as "home" said yesterday that he was seldom seen, but when he was, he described himself as a "travelling salesman".
He occupied a ground-floor bedsit at 17 Westcott St, a stone's throw from the Hull East Labour Party headquarters, where Mr Prescott holds his surgeries and which Trump infiltrated.
Yet there is no evidence that he intended to use it as a permanent base. Inquiries by The Independent have established that he was not on the electoral register and none of his credit cards were registered at the address.
Andrew Thomas, a 36-year-old student said: "We hardly ever saw him, but he wasn't here very often. I spoke to him once and he said he was a travelling salesman and simply used the flat as a base.
"But we did notice in the mail lots of Labour Party literature for him. I remember in particular one envelope that quite clearly said: 'Labour Party membership'. He was a very clean-cut chap and I did notice that he has a very new car."
Comparing what was happening now on the Sunday Times with what had happened more than 30 years ago, when he had been investigated by the same newspaper for his role in the controversial 1966 seamen's strike, Mr Prescott said: "It's a very shabby shadow of the those days."
"Now you get in there, tell them you're a mate, muck around in all the crap. It's not even an issue of politics. This is about internal tittle- tattle.
"The Sunday Times went up there with the object of showing corruption. They couldn't show corruption, and so he feeds the concept of corruption with all the tittle-tattle."
He told The Independent that he had been tipped off last year, after the May election, that people had been put into Hull to find corruption. "I was given a name, this man Trump. I checked it out; he had been in Bristol, then he changed to Hull, and I asked around the councillors and I asked my agent and he said he had heard this guy had been accepted by the party and [was] going out with the councillors for drinks and things like that."
Mr Prescott, Secretary of State for the Environment, Transport and the Regions, called the auditors in after allegations that 25 homes had been sold to Wyke Developments at a knockdown price of just over pounds 5,000 each, when they were worth about pounds 20,000.
The inquiry found that a "satisfactory price" was achieved for the taxpayer in the sale by the North Hull Housing Action Trust to Wyke Developments and that ministers were not involved in the transaction.Reuse content