Sir Malcolm Rifkind is under pressure to stand down from his key role scrutinising national security after becoming embroiled in allegations of 'cash for access'.

The former Foreign Secretary was captured on a secret camera telling representatives of a fictitious Chinese company that he could arrange "useful access" to every British ambassador in the world.

He also told them that he was "self-employed".

Within hours he and former Labour Foreign Secretary Jack Straw, who also appeared in the footage by Channel 4's Dispatches programme and a newspaper, had referred themselves to the parliamentary watchdog.

Both insisted that they had done nothing wrong.

Later, in an interview defending himself, Sir Malcolm said it was "quite unrealistic" to think MPs can live on "simply £60,000" a year.

Sir Malcolm oversees Britain's intelligence services on behalf of parliament in his role as the chair of the Commons Intelligence and Security Committee, a position which gives him access to top secret information.

But Labour claimed he had lost the support of the Prime Minister in that jobs after the MP had the Tory whip removed in the wake of the allegations.

Tory chief whip Michael Gove also announced that a disciplinary committee of the party would be convened to investigate Sir Malcolm's case.

David Cameron decline to back Sir Malcolm as a member of the powerful Security committee, saying it was a matter "for the committee and the House of Commons."

However, the Prime Minister described the allegations as "very serious matters".

Labour MPs called on him to Sir Malcolm to resign from the committee.

Labour MP Tom Watson said: "If the chair of the Intelligence Committee no longer has the confidence of the Prime Minister, then he shouldn't be in that position.

"I think the Prime Minister needs to form a view on whether he wants the Intelligence Committee chair to be working as a lobbyist for Chinese companies."

That call was angrily rejected by Sir Malcolm himself.

He said: "There is not link between the two.... (and no allegations have been made) that have any bearing on security matters".

He dismissed allegations of wrongdoing as "unfounded" and vowed to fight them "with all my strength".

He also said he was "irritated and angry" and insisted he had "nothing to be embarrassed about".

Edinburgh-born Sir Malcolm, who also served as Scottish Secretary and Defence Secretary, is said to have told undercover reporters in January that he could meet "any ambassador that I wish to see" in London.

"They'll all see me personally," he said. "That provides access in a way that is, is useful."

In a second meeting, he is said to have suggested that he would be willing to write to ministers on behalf of the company, without declaring the name of the firm involved.

Sir Malcolm also described himself as "self-employed", saying "nobody pays me a salary" and suggested his fee was between £5,000 and £8,000 for a half a day's work.

Later he said there were "about 200" MPs who had business interests and insisted many members of the public did not want "full-time politicians".

"If you are trying to attract people of a business or a professional background to serve in the House of Commons, and if they are not ministers, it is quite unrealistic to believe they will go through their parliamentary career being able to simply accept a salary of £60,000," he said.

"That sounds a lot to a lot of people earning less than that but the vast majority of people from a business or professional background earn far, far more than that."

In the wake of the allegations Labour leader Ed Miliband said that MPs should be banned from earning anything except small amounts from jobs outside parliament.

Downing Street said that Mr Cameron disagreed with the idea of a cap.

First Minister Nicola Sturgeon said: "These allegations are awful, appalling and shocking. They really must be very robustly investigated. All of this - cash for access, politicians whose outside interests compromise their integrity as parliamentarians - all of this conjures up the very worst of the Westminster establishment all over again."

Deputy Prime Minister Nick Clegg said ;"Whether there is individual wrongdoing or not, the cumulative effect is to deepen public scepticism about how politics operates and that's a great shame for anyone who believes in the quality of our democracy."

Mr Straw said he was "mortified" to have fallen for the sting.

He met undercover reporters at his parliamentary office - a potential breach of Commons rules.

There he explained how he helped ED&F Man, a a commodities company with a sugar refinery in Ukraine, change an EU regulation by meeting officials in Brussels for "under the radar" talks.

He was quoted saying he used "charm and menace" to convince the then Ukrainian prime minister to change laws on behalf of the same firm.

He made clear he would not take on the role while he remained an MP, but is said to have suggested that he could be more helpful to the company if he became a peer, as different rules apply to the House of Lords.

Mr Straw has already announced that he is standing down at the General Election in May.

But Sir Malcolm hopes to be re-elected as the MP for Kensington and Chelsea.