ANAS Sarwar lacks the “clean hands” needed to speak about the biggest story of the hour because of his own involvement with a tax haven, a senior Labour figure has said.

Ian Davidson said the Scottish Labour leadership candidate did not have the "consistency and credibility” required to take a stand on the Paradise Papers.

The massive data leak about the secret affairs of the rich and famous has thrust the issue of tax avoidance and evasion to the top of the political agenda.

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UK Labour leader Jeremy Corbyn said society was being damaged by a “super-rich elite which holds the tax system and the rest of is in contempt”.

Mr Sarwar’s left-wing leadership rival, Richard Leonard, has also backed calls for a public inquiry into the tax dodging revealed in the papers, which he called evidence of one set of rules for the many and another for the few.”

Mr Davidson, a former chair of the Commons Scottish Affairs Committee, said Mr Sarwar, who has yet to comment on the Paradise Papers, was fatally compromised.

The Herald revealed in September that, while a Glasgow MP, Mr Sarwar held shares in a software company based in a tax haven.

Parliamentary registers of interest show he declared a stake in Guernsey-based Picsel Group Holdings Limited from May 2010 until January 2011.

One of the company’s many subsidiaries, some based in other tax havens, subsequently went into administration owing more than £500,000 to the tax authorities.

At the time, MPs were only required to declare an interest in a company if they held more than 15 per cent of the issued share capital, or a smaller stake worth more than their salary.

An MP’s salary in the relevant period was £65,738.

Mr Davidson, the MP for Glasgow South West for 18 years until 2015, said Mr Sarwar also lacked credibility on the living wage, as he previously held a 23 per stake in a family business that didn’t pay the living wage of £8.45 and hour promoted by Labour.

Mr Davidson told the Herald: “I think it’s very significant that this is Living Wage Week, drawing attention to fact that over 400,000 Scots receive less than the living wage.

“There’s only one candidate, Richard Leonard, in the Labour leadership election who can speak on this issue with any credibility and consistency.

“Similarly, now that the Paradise Papers have come to light, outlining how so many of the rich and famous are using tax havens, again only candidate can speak with credibility and consistency on this issue without opening up the Labour party to cries of hypocrisy.

“Only one candidate has got clean hands on both of those issues and that’s why I’m supporting Richard Leonard.”

A spokesman for Anas Sarwar said: “This is yet another personal attack from one of Richard Leonard’s supporters, which comes straight from the SNP playbook.

“We will continue to focus on our real opponents - the Nationalists and the Tories.

“The reality is that Anas has campaigned for the Real Living Wage, and is the only candidate who has put forward detailed income tax proposals, which includes a tax cut of £263 for those on the new Real Living Wage of £8.75-an-hour.

“Anas also led the campaign for the Publish What You Pay Bill in the Commons, designed to improve tax transparency in the developed world, and his income tax proposal would clamp down on the super-rich through a 50p top rate for those earning £100,000 or more.”

SNP MSP Tom Arthur said: "This latest intervention shows just how terminally compromised Anas Sarwar's campaign is - given his complete and utter failure to practice what he preaches.

"If Sarwar can't even win over his old Westminster cronies, then he has little chance of winning over the party faithful."

The result of the leadership contest is due on November 18.