The Sun on Sunday reporter Mazher Mahmood tricked people into criminal acts in order to write about them, according to an explosive Panorama investigation that was finally aired on Wednesday night after twice being delayed for legal reasons.

Fake Sheikh: Exposed alleges that the police and prosecutors knew about Mahmood’s methods but failed to investigate properly, raising questions over the relationship between the police and the News of the World, Mahmood’s old title. He worked at the News of the World from 1991 until its closure and won several awards.

In the programme, which was bitterly contested by lawyers for Mahmood, the former attorney general Lord Goldsmith suggested that the convictions the reporter claimed credit for needed to be re-examined.

The programme, which showed exclusive video footage from News of the World’s own archives of Mahmood carrying out stings on various celebrities, also linked the reporter with a firm of private investigators connected with criminal behaviour.

Mahmood had argued in court that revealing his current appearance would breach his human rights by exacerbating the existing risk to his safety caused by his investigative work.

Mark Lewis, a lawyer for many phone-hacking victims, said of the alleged entrapment: “The damage it’s caused, the damage to people’s livelihoods, the amount of people sent to prison – it’s much, much bigger, far more serious than phone hacking ever was.”

Mahmood has denied acting improperly and says that Panorama’s account of events is wrong and misleading.

In July, Mahmood was suspended by the Sunday title owned by News UK, following the collapse of a trial involving the singer and former X-Factor judge Tulisa Contostavlos. The judge in the case suggested that Mahmood had attempted to persuade a witness to change his evidence and then lied about it under oath. There is an ongoing investigation into this case but no charges have yet been brought. Mahmood claims he used legitimate investigatory methods, which helped secure about 100 convictions during his 30-year career at newspapers, largely by posing as Arab royalty.

The 30-minute documentary heard from alleged victims of Mahmood and former colleagues who accuse him of “criminal” acts.

In one of the clips from the now-closed newspaper’s archives, Mahmood is seen dressed in flowing robes in a Savoy hotel suite and laughing at the impact a successful sting would have on John Alford, a former child actor who tells the reporter he is a recovering drug addict. In 1999 Alford was convicted of supplying drugs to Mahmood, and subsequently jailed for nine months. Even at his trial, Alford said that he was set up.

Alford told Panorama that he thought of suicide after the Mahmood story. “No one can give me the 18 years I’ve lost, no one can give me that back. I hope this is the first day of a new life for me.”

The programme also alleged that a murder inquiry in 1999 revealed links between corrupt police officers, a firm of private detectives called Southern Investigations and tabloid journalists including Mahmood.

One document seen by Panorama said: “Source met Maz, a News of the World reporter ... on this occasion Maz was with a plainclothes officer ... The officer was selling a story to Maz.”

Mahmood insists he has never bought stories from police officers, but Panorama has been told that evidence suggesting that a number of tabloid journalists could be paying police officers should have led to a full-scale inquiry – and did not. Several trials involving former tabloid journalists accused of paying public officials are ongoing.

In the programme, one former Page 3 girl called Emma Morgan describes how she thought she was being offered a lucrative contract for a Middle East bikini calendar when she was 24 but instead fell victim to Mahmood’s desire to expose her as a drug dealer. Put under pressure to supply cocaine by a man called Billy employed by Mahmood, she did so.

Steve Grayson, who worked with Mahmood on numerous stories in the 1990s including this one, said of the takedown: “He is a drug dealer, we’re drug dealers, we have paid this guy to supply the drugs to give to her.”

Billy told Panorama: “I’d like to apologise to Emma for my part in stitching her up. The only real criminal was Mazher Mahmood. He gave me the money to buy the cocaine.”

Morgan said: “I was a fool, I was naive; to be foolish isn’t a crime, to be naive isn’t a crime, to do what he did is criminal.

“I haven’t had the career I should have had, I haven’t had the life I should have had. He’s a horrible, horrible man,” she added.

The programme also explored the supposed plot to kidnap Victoria Beckham and her children, which led to armed police arresting a gang of five men. In 2002, the News of the World reported that Mazher Mahmood had stopped the “crime of the century”, but the Panorama reporter John Sweeney described how one of the kidnap gang, a convicted criminal called Florim Gashi, was being paid thousands of pounds to work with Mahmood. When the prosecution discovered Gashi had been paid by the News of the World and lied about it, the case collapsed. Five men had spent seven months in prison on remand.

Mahmood denies the kidnap plot was invented but the judge was so troubled by the payment to Gashi that he referred it to the then attorney general, Lord Goldsmith, who after taking legal advice found there was nothing he could do.

“The fact that somebody who has been accused by a judge of apparently not telling the truth may be instrumental in those convictions would certainly be a reason to look at those convictions again and to examine them to see whether they are safe,” Goldsmith told Panorama.

Panorama also alleged that Mahmood told detectives he got information from prostitutes and drug addicts before going on to say: “I’ve got bent police officers that are witnesses, that are informants.”

Mahmood said any criticism of him came from those he had exposed or people he had worked with who had an axe to grind. He tried to block the programme, citing the need to remain anonymous for security reasons, the threat of criminal action as well as the credibility of the Panorama witnesses.

The “fake sheikh” will soon learn if he is to face charges following the collapse of the Contostavlos trial. He denies perjury and perverting the course of justice. Already three cases based on his evidence have been dropped.

• Panorama Fake Sheikh: Exposed shown on BBC One at 7.30pm GMT on Wednesday 12 November