The European Parliament has opened an investigation into allegations that three senior MEPs - all former government ministers - have accepted bribes in return for tabling amendments in the chamber intended to water down legislation regulating the financial industry.

Late Sunday (20 March), the chamber's leadership launched an inquiry into the suggestions made in an eight-month Sunday Times sting operation by the paper's Insight investigative journalism team that three MEPs, former Austrian interior minister Ernst Strasser, Romanian former deputy prime minister Adrian Severin and former Slovenian foreign minister Zoran Thaler, had accepted bribes of up to €100,000 for tabling the motions.

Posing as banking lobbyists, the reporters had contacted some 60 euro-deputies attempting to seduce them with offers of cash in return for tabling amendments to financial regulation bills introduced in the wake of the economic crisis.

In the case of Severin, the MEP emailed the Sunday Times reporters, writing: "Just to let you know that the amendment desired by you has been tabled in due time," and submitted an invoice for €12,000.

Although Centre-right MEP Strasser initially claimed that he had known all along that the lobbyists were actually reporters, he resigned his position on Sunday after the head of the Austrian People's Party called for him to step down.

The other two deputies, members of the parliament's centre-left grouping, the Socialists and Democrats, have been called in for a dressing down by the leader of the S&D, Martin Schulz.

Calling the allegations as "extremely serious" Schulz said in a statement that if the allegations were confirmed, he said, he would take appropriate and necessary measures.

"I am appalled by the sums of money mentioned in the newspaper article," he said.

Severin, who has long battled EU monitoring of Romania for corruption, claiming that his country is no more corrupt than any other member state in the Union, for his part has denied the allegations, saying he did not do anything that is not common behaviour in the chamber.

"I didn't do anything that was, let's say, illegal or against any normal behaviour we have here," the paper reports him as saying in his defence.

Meanwhile, Thaler, who also claims to have known all along that he was being set up, attacked the newspaper for euroscepticism.

"From the very beginning of the immoral offer in December 2010, I knew that it was manipulation, an attempt to compromise and discredit a member of the European Parliament," he wrote in a statement on his personal website.

"[The] Sunday Times is otherwise well known for its open anti-EU editorial policy which it likes to emphasise," said Thaler.

Thaler is also the European Parliament's rapporteur (co-ordinator) on Macedonia's EU membership application, and has recently issued concerns about freedom of the press in Macedonia as a major concern as the country democratises.

He said that he did not take any money that was offered "and I had no intention of doing so in the future."

Transparency and development campaigners immediately called for an investigation into the links between financial lobbyists and lawmakers.

The revelations came as a fresh report from Spinwatch, a UK-based outfit that monitors the lobbying industry, highlighted Goldman Sachs lobbying activities in the wake of the crisis, including how the investment firm had won seats on many of the key advisory groups to European officials in charge of banking re-regulation.

Julian Oram, a campaigner with World Development Movement, a development charity that has worked recently on the role of the financial industry in the global south, said: "Financial lobbyists pose a threat to our economy and democracy. We need an urgent inquiry into the extent to which the financial industry is using shady unaccountable lobbyists to sabotage much needed banking reform regulation,"

The NGO demanded that all details of recent meetings between MEPs and European Commission officials and representatives of the financial services lobby be published.