LORD Steel, the former Liberal leader and Holyrood’s first Presiding Officer, has told an inquiry how a paedophile MP confessed to him about spanking boys but he did nothing about it.

The LibDem peer told the Independent Inquiry into Child Sex Abuse the late Cyril Smith also admitted holding boys’ testicles in ‘medical examinations’ at a council hostel.

He said: “Obviously I disapproved, but it was - as far as I was concerned - past history.”

Last year Lord Steel told BBC Newsnight “nothing had been proved” against Smith, and said it would be wrong to say he was an abuser based on “scurrilous hearsay” and “tittle-tattle”.

The offences were committed in the 1960s at the Cambridge House Hostel in Rochdale, which Smith had helped set up when he was Labour councillor in the town.

The police investigated and recommended prosecution but in 1970 the Director of Public Prosecutions decided not to proceed, a decision the DPP says would not happen today.

In 1979, the allegations were reported in a local paper in Rochdale where Smith, later unmasked as a prolific paedophile, had become the Liberal MP.

They were then reprinted in Private Eye, to which Lord Steel, then Liberal leader, subscribed.

Lord Steel told the inquiry he “accepted the article as presumably correct” and questioned Smith about it shortly after the 1979 general election.

At the time, the Liberal party was being rocked by a scandal over former leader Jeremy Thorpe, who was accused of trying to have a former gay lover murdered.

Lord Steel said he had a "brief" conversation with Smith about the allegations about him,

He said: “What I said to him was, ‘What's all this about you in Private Eye?’ and he said, rather to my surprise, ‘It is correct’, that he had been in charge of - or had some supervisory role in a children's hostel, that he'd been investigated by the police, and that they had taken no further action, and that was the end of the story.

“I was just trying to find out whether this was correct or not, and it was.”

Lord Steel said the claims were of little interest to him because they were “quite old” and dated from when Smith was a councillor.

He said: “I saw no reason, or no locus, to go back to something that had happened during his time as a councillor in Rochdale.”

He said his opinion was that Smith had been “misusing” his supervisory role at the hostel.

He said he "had some supervisory role in the hostel as a councillor which entitled him to do these things, which I disagreed with, but, still, that was his view”.

Smith, who at 29-stone was an instantly recognisable public figure in his day, was a Liberal MP from 1972 until his retirement from Parliament in 1992.

He was knighted in 1988 and died at the age of 82 in September 2010.

Asked by Inquiry Counsel Brian Altman QC if he understood, from their conversation, that Smith committed the offences referred to in Private Eye, Lord Steel said: “I assumed that.”

Asked if that “wasn't that all the more reason to take matters further and hold some form of inquiry”, the peer said “No, because it was, as I say, before he was an MP, before he was even a member of my party. It had nothing to do with me.”

He said he “never” raised the subject again with Smith.

Asked why he didn’t tell the Honours Committee about Smith’s confession before he recommended him for a knighthood, Lord Steel said: “It never occurred to me to tell the Honours Committee about it. It was all, in a sense, in the public domain through Private Eye.

“But what I can say is that, if I'd had any suspicion that these activities had been continuing or he'd been involved in any activity after he'd been an MP, then I certainly would not have recommended him for a knighthood. That would have been my natural instinct.”

Asked if he ought to have asked Smith about it before recommending him for a knighthood, Lord Steel said : “No, I don’t think so.”

Asked why he had referred to scurrilous hearsay and tittle-tattle in last year’s Newsnight interview despite the confession, Lord Steel said he had been thinking of contemporary events in 2018 and a 2014 book by former Labour MP Simon Danczuk about Smith.