The US online news website Gawker is attempting to raise $200,000 (£132,000) to buy and publish a tape which they allege shows the mayor of Toronto, Rob Ford, smoking crack cocaine.
Reporters from both the gossip website and The Toronto Star claim to have seen the video and allege it shows the controversial mayor inhaling from a pipe.
The video, which has caused uproar in Canada, has not been released publicly and there is no way at this stage to verify whether it is authentic or not.
Mr Ford has strongly denied the allegations telling reporters the claims were "ridiculous".
He later made similar comments outside his office and added that it was "another story with respect to the Toronto Star going after me."
The Toronto Star claims that two of its reporters were shown the video, which was reportedly filmed on a smartphone on 3 May, after meeting an anonymous tipster in a car park.
The Star said two reporters watched a video that appears to show Ford, sitting in a chair, inhaling from what appears to be a glass crack pipe.
The Star said it did not obtain the video or pay to watch it.
The newspaper also alleges Ford made an anti-gay slur against federal Liberal leader Justin Trudeau in the footage.
However, Toronto deputy mayor Doug Holyday today questioned the authenticity of the video, saying "video can be altered" and "drug dealers can't be trusted."
Holyday said he has not spoken to Ford or his staff since the allegations surfaced, but noted he still believes in the mayor "at this point."
"I'm not sure who is behind this. I wouldn't want my career or my credibility resting on the word of drug dealers," Holyday said.
Gawker editor John Cook said in a blog post that he had also seen the clip and was now attempting to raise the $200,000 required to buy it and publish it online.
In the blog post he claims that if the $200,000 is raised he will publish a "crystal clear, well-lit video of the mayor of Toronto smoking crack cocaine, published on Gawker for the world to see."
The blog post also states that should the individuals who have pledged to sell the video disappear Gawker will: "Donate every penny we receive to a Canadian non-profit that helps people suffering from addiction and its consequences."
The allegations are just the latest in a series of bad press reports for Mr Ford.
Earlier this year The Toronto Star alleged that he was asked to leave a gala fundraiser for wounded Canadian soldiers because he was intoxicated.
He also provoked controversy by saying that Toronto would be better off if it didn't accept more immigrants.
Half of Toronto's population was born outside Canada.
The scandal over the alleged video was compared to the 1990 arrest of former Washington Mayor Marion Barry who was videotaped smoking crack cocaine in a hotel room during an FBI sting operation.
He served six months in federal prison on a misdemeanor drug possession conviction but was elected again to the D.C. Council in 1992 and continues to represent one of the city's poorest areas.