A fresh “sleaze” row erupted on Sunday as the Liberal Democrats called for a police inquiry into allegations that four Labour peers were prepared to accept money to change proposed laws.

Chris Huhne, Lib Dem home affairs spokesman, said he would ask Scotland Yard to investigate a Sunday Times report that the peers – including two ex-ministers – had told undercover reporters they would be willing to work behind the scenes to secure amendments for business clients in return for fees of up to £120,000.