A lawyer acting for victims in the Independent Inquiry into Child Abuse has hit out at the “behind closed doors” probe by the Scottish Liberal Democrats into remarks made by David Steel over claims concerning the late MP Cyril Smith.

Lord Steel said he was “relieved” that the party’s investigation had cleared his name and restored the party whip. He insisted he had throughout his political career maintained the highest standards and had always sought to help the life chances of young people, "especially those who have had the toughest start".

But Richard Scorer, a lawyer acting for seven victims in the abuse inquiry, questioned the party's process, saying: "I find it disappointing that the Liberal Party has chosen to make this decision and it is premature to do so without first considering the findings of the public inquiry.”

He added: "Lord Steel's evidence and the dismissive way in which he delivered it was truly shocking. The least my clients are owed is for the matter to be investigated in an open and transparent way rather than behind closed doors."

The Scottish Lib Dems were approached for a response to Mr Scorer’s remarks but declined to give one.

In March, Lord Steel, the former Liberal Party leader, was suspended and had the parliamentary whip removed following remarks he made to the abuse inquiry[IICSA].

The 80-year-old peer explained how in 1979 he had asked Smith about allegations that he had abused boys at a Rochdale hostel in the 1960s after an article appeared in the Private Eye satirical magazine.

Lord Steel said he came away from the conversation "assuming" Smith had committed the offences.

He explained: "It was before he was an MP, before he was even a member of my party. It had nothing to do with me."

The abuse inquiry was told the party had held no formal investigation into the claims against Smith.

The allegations had been investigated by the police in 1969. However, no prosecution was brought.

Announcing the result of the internal probe, Willie Rennie, the Scottish Lib Dem leader, said the party’s executive had determined, “after careful consideration, that there are no grounds for action against David Steel”.

Stressing the Lib Dems took the issue of vigilance and safeguarding extremely seriously, Mr Rennie explained: “The clarifications David Steel has provided to us state clearly Cyril Smith did not confess to any criminality, which is why he took no further action at the time.”

He added: “David Steel’s national and international reputation is beyond doubt and this has been a difficult matter for us to consider but it is important for everyone to understand that the Liberal Democrats will always investigate such serious matters.”

Lord Steel said he was pleased and relieved the executive had “lifted my suspension from the party and cleared my name”.

“I believe in the highest standards of safeguarding for young and vulnerable people. As such, I voluntarily attended the IICSA hearing and offered open and honest answers, some of which have been erroneously reported and taken out of context. These inaccurate elements led some to question my own such commitment. Opinions and assumptions are not facts and those expressed in some quarters have caused me great personal distress,” he added.