A NORTH-EAST Labour peer who has denied breaching parliamentary rules after being caught up in a newspaper lobbying sting has been suspended by the party pending an investigation. 

Lord Mackenzie of Framwellgate is one of three peers caught up in an undercover sting by Sunday Times reporters posing as representatives of an energy firm.

A Labour spokeswoman said Lord Mackenzie and Lord Cunningham, who was also involved in today's revelations, have been suspended from the party pending an investigation into claims they breached parliamentary rules

In a statement, the party said: "The Labour Party expects the highest standards of its representatives and believes that they have a duty to be transparent and accountable at all times."

The Sunday Times said the peers were caught offering to ask parliamentary questions and lobby ministers in return for cash.

All three are believed to have referred themselves to the parliamentary watchdog.

The Sunday Times reported that Lord Mackenzie explained how he had devised a rouse that allowed him to host events for paying clients, by asking colleagues to hold them for him.

The paper also alleged that he was happy to ask questions and approach ministers in the Lords to bend their ear.

But speaking on Radio Five Live Lord Mackenzie denied any wrong-doing, and said he thought he was being asked to be a consultant for the sham company and had followed the Parliamentary Code of Conduct.

When asked if he had done anything wrong, he said: "Not at all, I'm very clear on the rules."

The Sunday Times said during the sham interview Lord Mackenzie was asked whether he could get around Parliament's rules which stop peers from booking events related to their financial interests.

But Lord Mackenzie, the former president of the Police Superintendents' Association, told Five Live that it is within the rules to ask someone else to host a party if it is a charitable do.

"It's a difficult path to wind along to make sure you don't breach the rules, but I'm quite clear it's perfectly legitimate to ask another peer to host that and that gets me off the hook as far as hosting it," he said.

"I didn't ask anyone to ask a question.

"I'm not being paid to ask questions and that's the point.

"There's no difficulty in any member of the House of Lords in raising a subject in which he has a financial interest providing he's on the register as being a consultant ... and of course it's properly declared, what is wrong is a member of the House of Lords actually joining a lobbying company that tries to lobby ministers to change and influence legislation, and to ask questions on behalf of a company.

"Now I certainly wouldn't do that and I'm clear in my mind of the difference."

He insisted that after the interview he took the decision not to be involved with the fake company because he thought the offer was very near the mark to breaking the parliamentary code of conduct - and not because he was warned about a possible scam.

Ulster Unionist peer Lord Laird, who was also caught up in the sting, said he had referred claims that he offered to act as a paid advocate for lobbyists, to a watchdog.

"I wish to make it clear that I did not agree to act as a paid advocate in any proceedings of the House nor did I accept payment or other incentive or reward in return for providing parliamentary advice or services," he said.