MP: My homes from Glasgow to Portugal are no £1m portfolio

George Galloway was forced into a defence of his property interests yesterday as he launched a counter-offensive against claims that he had taken money from Saddam Hussein's regime.

The Labour MP hit back at press reports that he owned property valued at more than £1m in Britain and Portugal. He said his most expensive home, in Streatham, south London, was bought in 1996 for £220,000. Mr Galloway said he bought his second property in the Algarve for £82,000 in 1998.

Writing in The Independent today, Mr Galloway also described claims that he had taken up to £375,000 a year from the former Iraqi regime, as first claimed in an alleged Iraqi document reported in The Daily Telegraph on Tuesday, as "a lie of fantastic proportions".

The MP for Glasgow Kelvin wrote it would be proved in court that he had never "personally benefited" from his work in Iraq. "The Telegraph says I traded in oil and food under the oil-for-food programme. To whom did I sell this oil, which incidentally is done through the United Nations sanctions committee and subject to the most forensic scrutiny? And what happened to the proceeds; in other words, where is the money?" he asked.

In a statement, Mr Galloway said he suspected the reports, which he said exaggerated his property interests, were "deliberately misleading".

The reports could have been seen to add weight to the allegations based on documents found by a Daily Telegraph reporter in Baghdad that Mr Galloway had received £375,000 a year of oil profits from Saddam's regime, and that he had demanded even more.

A headline in The Daily Telegraph had said yesterday: "MP in Saddam Hussein's pay defends himself from £250,000 villa in the Algarve". The Daily Mail printed photographs with captions declaring: "House No 1: His £750,000 home. House No 2: The property in Portugal."

The Daily Telegraph and the Scottish Daily Record estimated that Mr Galloway's London home was worth £800,000.

In his statement yesterday, Mr Galloway admitted that he did not own a home in his own constituency. He said his properties were worth nowhere near as much as had been reported. Furthermore, he said, they were heavily mortgaged.

"I should like to correct a number of, I suspect, deliberately misleading comments in this morning's newspapers about my personal property, income etc," Mr Galloway said.

"My converted farmhouse, jointly owned with my wife, Dr Amineh Abu-Zayyad, in the Algarve, was purchased for £82,000 in 1998. It was mortgaged to the tune of £76,000. Although I have, through my own hands and that of my family, much improved it, it is in no way capable of bearing the description worth 'a quarter of a million pounds' in some of today's papers.

"Secondly, I do not pay the mortgage on my ex-wife's London home. She does not have a mortgage and does not own property in London or elsewhere. Thirdly, I do not own a '£190,000 flat' in my Glasgow constituency. I do not own any property in Glasgow. Fourthly, my house in Streatham, jointly owned with my wife [in] south-west London, was bought for £220,000 in 1996.

"It is mortgaged to the tune of £290,000 as a result of renovation. It is not worth £800,000 as stated in today's newspapers; it was very recently valued as being worth £500,000."

Mr Galloway pointed out that, as well as his income as an MP, he writes a column in The Mail on Sunday. There are reports that he earns between £70,000 and £75,000 a year from this column. He said last night: "I hope my journalistic efforts are more accurate than those mentioned above."