Sarwar: Insists he is innocent

Allegations "baseless, false and ludicrous"

Sarwar Confident of Clearing his Name

His statement was followed by a Labour Party announcement rejecting speculation that the MP faces having the whip withdrawn. The party was reacting to a report in Thursday's edition of The Scotsman that Mr Sarwar could face sanctions like removal of the whip or temporary suspension of party membership. The paper added that Mr Sarwar would be expelled only if the police found hard evidence against him.

In his first interview since Labour launched an internal inquiry, Mr Sarwar told the BBC Newsnight programme that the bribery allegation and the claim that the Govan Labour Party tried to "rig" the election were "baseless, false and ludicrous".

Mr Sarwar became Britain's first Muslim MP when he was elected on May 1 to represent Glasgow's Govan constituency.

But his future was called into question when a Sunday newspaper claimed he had given election rival Badar Islam, the Independent Labour candidate, £5,000 to "ease off" his campaign.

In the interview, Mr Sarwar said such loans were normal business practice. "There will be hundreds of people in Glasgow I've helped, and this has helped my business as well," he said.

But the multi-millionaire businessman added: "I intend to resign from the business and be a full-time MP, but I am sure my brother will continue the family tradition to help people in need."

Malik: Loan not bribe

Mr Sarwar also denied any wrongdoing in encouraging members of the Asian community to register to vote.

"In any democracy it should be a priority for those people who are not on the electoral roll to get them onto the electoral roll," he said. "The Labour Party encouraged this and I think we have done nothing wrong."

Newsnight said it had seen documentary evidence which Mr Sarwar would use to support his claim that the money given to Mr Islam was a secured personal loan.

Tariq Malik, who it is claimed was the only witness to the transaction, told the programme he believed the money to be a loan, not a bribe.

Michael Graham, who gave evidence to Labour's inquiry, told the programme: "Regardless of the police inquiry, I think there's been enough damage done as regards bringing the party into disrepute."

"For whatever reason, he admitted handing a sum of £5,000 to his political opponent. As soon as he admitted that, he should have stepped down," he added.