Former Liberal leader told child abuse inquiry he assumed in 1979 that allegations against MP were true

David Steel has been suspended from the Liberal Democrats after admitting he was aware that Cyril Smith was a child abuser but failed to assess whether he was a risk to children.

Party officials decided on Thursday night that Lord Steel, the former leader of the Liberal party, should have the whip withdrawn and face a formal investigation.

It follows an outcry over the peer’s testimony to an inquiry that in 1979 the late MP for Rochdale confirmed reports that he had assaulted children.

Rather than launch an investigation into Smith, Steel said he allowed him to continue in office and waved through a recommendation for a knighthood.

Steel also appeared on the BBC’s Newsnight programme last year and claimed allegations against Smith were “tittle tattle”. Smith went on to abuse a number of other boys after 1979, victims have claimed.

In a statement on Thursday night, the office bearers of the Scottish Lib Dems said they had studied Steel’s testimony to the independent inquiry into child sexual abuse and decided to launch a formal inquiry. Vince Cable, the party’s leader, praised the swift action of the committee.

Steel defended his decision not to investigate Smith and claimed the media had generated “sensationalist headlines” by distorting his testimony to the inquiry.

“It is unfortunate that some sections of the media have chosen to extract certain passages of evidence and present them without the full context,” he said.

Smith stepped down as an MP in 1992 and died in 2010. He faced claims that he abused young boys from the 1960s to the 1980s.

Under questioning at the inquiry, Steel said he confronted Smith about the allegations of child sexual abuse in 1979 after reading them in Private Eye.

Young boys in Rochdale children’s homes had said that their local MP had stripped, spanked and bathed their buttocks, and fondled their genitals, the magazine reported.

Steel told the inquiry he questioned Smith about the allegations during a meeting in the House of Commons. “What I said to him was: ‘What’s all this about you in Private Eye?’

“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,” the peer said.

Allegations of sexual assault by Smith had been investigated by Lancashire police in 1969 but no action was taken.

Steel said that he did not question Smith further about specific child abuse claims but concluded that the allegations were true. The inquiry counsel, Brian Altman QC, asked: “So you understood that he’d actually committed these offences, from what he said to you?” Steel responded: “I assumed that.”

Steel said he did not ask the party to launch any form of formal inquiry into Smith because the alleged incidents had already been investigated by police and took place before Smith was voted in as an MP in 1972 and before he joined the Liberal party.

He later went on to pass a recommendation that Smith should receive a knighthood in 1988, which was successful.

Steel, the son of a Scottish church minister, was the Liberal leader from 1976 to 1981, led the party into an alliance with the SDP and served as an MSP from 1999 to 2003. He has been a life peer since 1997.

Responding to Steel’s suspension, Richard Scorer, a specialist abuse lawyer at Slater and Gordon which represents some of Smith’s alleged victims, said: “My clients will welcome the news that Steel is finally being made to face the consequences of his inaction.

“His failure to stop Smith in 1979, allowing him to go on and abuse more young boys, is inexcusable and he must be held to account. His attempts to backtrack and blame the media will not wash. He cannot get away from what he actually told the inquiry under oath.

“He should be stripped of his peerage. To allow him to keep it will be seen by victims as condoning his behaviour.”

One of Smith’s victims, now in his 70s, gave evidence to the inquiry last year over the abuse he suffered. Following the inquiry’s hearing on Wednesday, he said: “I would love to have a debate with Steel face to face. To ask him why he did nothing.

“To me he is just as guilty because as the party’s leader he had the opportunity to stop Smith and he didn’t.”