The 56-year-old MSP for Glasgow Cathcart was caught on CCTV setting fire to curtains at the Prestonfield Hotel in November 2004 after attending the Scottish Politician of the Year Awards.
The three-times married former minister, who was made a life peer in 1997, pleaded guilty to wilful fire-raising when he appeared at Edinburgh Sheriff Court. Faced with the prospect of a prison sentence when his case returns to court in three weeks, he announced he would resign from the Scottish Parliament.
Sheriff Katherine Mackie was shown footage of Lord Watson of Invergowrie crouching at the base of the hotel curtain that, minutes later, was enveloped with flames.
Depute Fiscal Adrian Fraser, for the prosecution, said Lord Watson had been drinking heavily that evening and had acted in a "hostile manner" towards a night porter earlier. He said that at a private function following the awards the peer also "forcibly requested" more drink, eventually being given a bottle of wine to keep him quiet.
By the time fire broke out in the ground floor reception of the hotel at about 2.15am most of the 400 guests who attended the function had left the party.
Although hotel staff put out the fire without calling the fire brigade, they alerted police after viewing a security tape that had recorded a kilted figure stooping close to the base of the curtain which caught fire moments later. Lord Watson then "categorically" denied any wrongdoing.
A fire expert, James Wood, said the hotel occupants had been placed in "a potentially dangerous situation" from both the fire and the smokethat caused damage of about £4,500.
Paul Burns, for the defence, said drink was not the only factor in the case. "There is a price to be paid for the pressures of public life and, like many persons in public life, there are sadnesses and disappointments in Mr Watson's private life that I suspect go some long way to explaining the sad chain of events that bring us here," he said.
"The events of this night are as incomprehensible to Mr Watson as they must be to the many people who have looked at them. It's a great sadness that such a career should be brought to such an abrupt standstill by the perplexing events of 12 November, 2004."
Since being charged, Mr Watson has been allowed to sit in the House of Lords and the Scottish Parliament but excluded from the Labour whip and party meetings.
The economics and industrial relations graduate was elected to Westminster as an MP for Glasgow Central in a by-election in 1989 and went on to make a name for himself in opposing the first Gulf War and the Maastricht Treaty.
He lost his seat after boundary changes and was ennobled by Tony Blair. After being elected to the Scottish Parliament as an MSP he incurred the wrath of the countryside lobby by introducing the hunting Bill.
He was also an executive minister, having been appointed tourism, culture and sport minister in First Minister Jack McConnell's inaugural cabinet in November 2001, but was sacked two years later. He will be sentenced on 22 September.Reuse content