Image copyright Getty Images Image caption Lord Steel was leader of the Liberal Party and the Liberal Democrats and Holyrood's first presiding officer

The Lib Dems have reinstated former leader David Steel after a probe into what he knew about abuse claims against the late MP Cyril Smith.

The peer was suspended from the party after comments he made about Smith to an independent child abuse inquiry.

He said he had "assumed" allegations against the Rochdale MP were true, but that it was "nothing to do with me".

The party ruled there were "no grounds for action" against Lord Steel as Smith "did not confess to any criminality".

Scottish Lib Dem leader Willie Rennie said it had been important to seek "clarification", but said the issue had boiled down to "a hearing difficulty and a lack of precision in providing some answers" on the part of Lord Steel.

Lord Steel said that his "open and honest answers" had been "erroneously reported and taken out of context", which had caused him "great personal distress".

However, a lawyer representing some people who allege they were abused by Smith said the decision was "disappointing" and that the issue should have been investigated in a "thorough, open and transparent way rather than behind closed doors".

The probe centred on a meeting Lord Steel - then leader of the Liberal Party - had with Smith in 1979 about claims he had abused boys at a Rochdale hostel in the 1960s.

Police had investigated allegations about the abuse of teenagers at the Cambridge House hostel a decade earlier, in 1969, although no-one was ever prosecuted.

Lord Steel said he had discussed the allegations with Smith - the MP for Rochdale between 1972 and 1992 - after an article appeared in Private Eye magazine.

The 81-year-old told the Independent Inquiry into Child Sexual Abuse that "the matter had been investigated by police, no further action was taken and that was the end of the story".

But in exchanges with inquiry counsel Brian Altman QC, the peer appeared to agree that he had "assumed" the allegations were true.

Image copyright Getty Images Image caption Cyril Smith (left) and David Steel (right) discussed the allegations in 1979

Mr Altman asked: "So you understood that he's actually committed these offences, from what he said to you?"

Lord Steel responded: "I assumed that."

The QC then asked: "Wasn't that all the more reason to take matters further and hold some form of inquiry?"

The peer answered: "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."

The Scottish Liberal Democrats subsequently suspended Lord Steel, saying that "an investigation is needed".

The party's executive group has now determined that there are "no grounds for action" against the former MSP and Holyrood presiding officer.

Mr Rennie said: "We take the issue of vigilance and safeguarding incredibly seriously, so it was important to investigate following the evidence that David Steel gave to the independent public inquiry. In part because of a hearing difficulty and a lack of precision in providing some answers it was necessary to seek further information from him for clarification.

"The clarifications that David Steel has provided to us state clearly that Cyril Smith did not confess to any criminality which is why he took no further action at the time."

Image caption Scottish Lib Dem leader Willie Rennie said Lord Steel had "a hearing difficulty" during the inquiry session

Lord Steel said he was "naturally pleased and relieved" with the decision, which was made by the party executive on Sunday.

He said: "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."

But lawyer Richard Scorer, who represents some of those alleging abuse by Smith, said the party's decision was "disappointing".

Mr Scorer, of law firm Slater and Gordon, also claimed it was "premature" of the Liberal Democrats to conclude their investigation without waiting for the findings of the abuse inquiry.

He said: "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 a thorough, open and transparent way rather than behind closed doors."