Labour grandee reveals a curious story of sexual harassment, £500,000 hush money and 'The Sun'

It was an astonishing claim by a senior Labour MP, made in the solemnity and seriousness of the Commons. When Clive Soley rose from the green benches to raise a point of order few expected his remarkable claims. The former chairman of the Parliamentary Labour Party told MPs he had knowledge of a cover-up of sexual harassment, indeed of "extremely offensive and destructive behaviour", at Britain's biggest-selling newspaper, and Downing Street ally, The Sun.

And, the politician told the Speaker, he had been threatened by the editor of that paper for investigating the alleged scandal. The saga dated back to a meeting Mr Soley said he had with a nervous intermediary, who passed him a letter. Inside, on six pages headed with the name Olswang, a firm of London solicitors, were allegations of appalling sexual harassment at Rupert Murdoch's News International headquarters. The accusations were directed at Stuart Higgins, a former editor of The Sun.

Mr Soley said the letter confirmed suspicions he had held for seven years, since the alleged victim approached him at a gathering in London and shared a conversation about the culture within British tabloid newspapers.

Yesterday in a moment of high drama, the MP used his parliamentary privilege to make public details of the alleged scandal, which he claimed had been covered up by News International. "I understand the eventual settlement involved payment of about £500,000 with a condition of silence imposed on the victim," he told MPs. "As far as I am aware, no proper disciplinary hearings took place and other senior staff appear to have colluded with what was, by any standard, extremely offensive and destructive behaviour."

Mr Soley brought the present editor of The Sun, Rebekah Wade, into the dispute, claiming she had tried to intimidate him as he investigated the matter. He told the Speaker, Michael Martin: "I have to raise this with you because after I had written to Les Hinton, who is the chief executive of News International, I then received a letter from Rebekah Wade, editor of The Sun. The letter asked me how many complaints of sexual harassment had been made to me while chairman of the Parliamentary Labour Party, by my staff, the Parliamentary Labour Party staff and by MPs' staff. In fact, I had received none.

"It must be a matter of serious public concern when a major multinational media group uses its editors to threaten an MP who is carrying out a legitimate inquiry into that group's employment practices."

Mr Martin promised to investigate. Within minutes, the story was sweeping through the newsrooms of "Fleet Street", where Mr Higgins is still referred to as "Higgy the Human Sponge". The nickname was coined by another former Sun editor, Kelvin MacKenzie. After a mistake in publication of winning lottery numbers, readers were invited to call "Higgy the Sponge" and complain on his direct line.

Mr Soley said last night he had called the former Sun editor at home a month ago and indicated he intended to reveal details of the solicitor's letter. The MP said Mr Higgins told him he was leaving the house to attend a school parents' and governors' meeting. Mr Higgins has had a long and widely respected career in journalism. The 47-year-old edited The Sun between 1994 and 1998. During his time in charge of the traditionally Tory-supporting Sun, he arranged, with Mr Murdoch, for The Sun to support Tony Blair at the general election. The sensational development was linked by some to Mr Higgins' long-standing friendship with Mr Blair's former communications chief Alastair Campbell, dating from when they had been rival reporters in the West Country. Mr Higgins now runs a successful PR company, which acts for SFX, the management agency used until recently by David Beckham.

Yesterday Mr Soley said his concerns were not just about Mr Higgins but the culture in tabloids of reporting the sexual peccadilloes of others while "covering up their own problems". He said: "I don't have a personal vendetta against The Sun, I really don't."

News International issued a statement accusing him of abusing his parliamentary rights. "Mr Soley has hidden behind parliamentary privilege to raise allegations made seven years ago concerning two ex-employees of News International," it said. "He has made the extraordinary decision to name one of these employees despite having no knowledge as to the truth of the allegations or to the outcome of the alleged complaint. This would not appear to be a proper use of this ancient privilege."

Mr Soley has for at least a decade been a bête noire of the tabloid press. In 1992, he introduced a Freedom and Responsibility of the Press Bill, which incurred the wrath of The Sun. While preparing it, the MP made a tour of newsrooms and asked for a visit to The Sun, expecting refusal would prove his point about lack of accountability. "The buggers let me in," he said yesterday. Inside News International, Mr Soley claims he picked up on an atmosphere in the Sun newsroom that caused him concern.

Then in 1996, he said he met the "very distressed" female who had worked for News International. Mr Soley said he continued his inquiries, and contacts within News International "have been helpful over the years in telling me not to give up". This July, he received the Olswang letter, which had been sent to News International on 21 May 1996. It recounted how a woman of "cheery, outgoing personality" had allegedly suffered physically and mentally because of her unhappiness in her working environment.

The letter said she "felt it necessary to have showers when she got home at night to wash away the cesspit feelings" she had from work. The Olswang letter said News International was liable to a claim for negligence for failing to deal properly with the woman's complaints when she brought them to their attention.

In Parliament yesterday, Mr Soley said it was "likely" details of the incident were reported to Mr Murdoch. He said: "There was no attempt to deal with the underlying problem of sexual harassment and bullying and my contacts tell me it was not an isolated case."

In a footnote to its statement, News International pointedly observed: "The Sun's investigation into harassment in Parliament is ... ongoing." Last night Stuart "The Human Sponge" Higgins, the editor turned public relations guru, had a new client: himself.

CLIVE SOLEY'S STATEMENT TO THE COMMONS

"I am concerned about the letter I received from an editor of a major newspaper following queries I'd raised about sexual harassment and bullying at News International.

"Recently I received an unsolicited copy of a letter to News International lawyers from a firm representing a victim of serious sexual harassment.

"The eventual settlement involved payment of about £0.5 million. The police were not called when hate mail was ... sent on News International stationery to the victim.

"After I had written to ... the chief executive of News International, I ... received a letter from Rebekah Wade, editor of The Sun . The letter asked me how many complaints of sexual harassment had been made to me while chairman of the Parliamentary Labour Party, by my staff, the Parliamentary Labour Party staff and by MPs' staff. In fact I had received none.

"It is impossible to see this letter as anything other than a threat. It must be a matter of serious public concern when a major multinational media group uses its editors to threaten an MP."