TWO North-East peers have been suspended from the Labour Party over claims they offered to carry out parliamentary work in return for cash.

Ex-cabinet minister Lord Cunningham and former senior police officer Lord Mackenzie, of Framwellgate, who both deny wrong-doing, were recorded by undercover Sunday Times reporters posing as lobbyists.

In a statementn yesterday, the party said the pair have been suspended from  Labour "pending further investigation".

Lord Laird is said to have resigned from the Ulster Unionist party whip after being targeted by the same investigation.

All three deny breaching the rules and have referred themselves to the House of Lords Commissioner for Standards.

The three peers are alleged to have told reporters posing as lobbyists representing a fake solar energy firm they could help push its agenda in apparent breach of a ban on paid advocacy.

In an interview with Five Live, Lord Mackenzie, the former president of the Police Superintendents Association, said: “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."

In a statement, Lord Cunningham said the report of his meeting with the bogus lobbyists was misleading and that he was taking legal advice.

He is alleged to have offered to ask parliamentary questions on behalf of the firm and take concerns directly to the Prime Minister.

Lord Cunningham, a former Chester-le-Street councillor, who was an MP for 22 years and served in Tony Blair’s cabinet, insisted he had been testing his suspicions that he was being targeted by a scam.

He said: “What the article does not make at all clear is that I told the undercover journalists that I always stick to the rules and declare any interests.”

It comes just two days after MP Patrick Mercer quit the Tory whip, referred himself to the Commons sleaze watchdog and announced he would quit the Commons in 2015 over similar allegations.

It is claimed he tabled parliamentary questions and a motion, offered a security pass and set up a parliamentary group for a lobbying firm paying him £2,000 a month to push for the end of Fiji's suspension from the Commonwealth.

They were in fact undercover reporters from the BBCs Panorama programme and the Daily Telegraph.

A Labour Party spokesman said: “Where there is genuine evidence of wrong doing, including non-compliance with the Code of Conduct, the Labour Party will consider appropriate disciplinary action as and when necessary.”