Donald Trump’s father ordered an employee to “get rid of blacks” in an apartment block and to avoid renting out flats to them, a newly released FBI dossier has claimed.

The potentially damaging allegations of racial discrimination relate to 1973 when Fred Trump was chairman of the Trump Management Company – and his son Donald was heavily involved in the family firm as its 27-year-old president.

They are contained within a 389-page dossier that has just been made public by the FBI – at a time when the US President is already tweeting furiously about how “classified information is illegally being given out” by the intelligence community “like candy”.

The ex-Trump employee – who said he was fired after annoying Trump Sr by proposing changes that involved his company spending money – told an FBI special agent that in December 1973: “Fred Trump told me not to rent to blacks.

“He also wanted me to get rid of blacks that were in the building by telling them cheap housing was available for them [elsewhere] at only $500 down payment, which Trump would offer to pay himself.”

Elsewhere in the FBI dossier, a former doorman at a Trump property in Brooklyn claimed that a supervisor “told me that if a black person came to 2650 Ocean Parkway and inquired about an apartment for rent, and he was not there at the time, that I should tell him that the rent was twice as much as it really was, in order that he could not afford the apartment”.

The dossier, which has just been published on the FBI’s freedom of information page, also contains allegations of black people being told no apartments were available for rent, while whites later sent to check on the same properties found they were available.

It appears to contain all the FBI’s documents relating to an investigation conducted between 1972 and 1974 into allegations that the Trump Management Company had discriminated against applicants for apartment rentals on account of their race.

Many of the documents, which are redacted in places, consist of interviews in which people connected to Trump properties insist they were unaware of any discrimination at all.

It is, however, extremely unlikely that President Trump will welcome the release of the FBI dossier when he is already under fire for his attempted “Muslim ban” on people entering the US and campaign statements about immigrants that accused many of them of being criminals, rapists or “bad hombres”.

The release of the dossier also comes two days after Trump’s security adviser Michael Flynn had to resign over a phone call to Russia’s ambassador to the US.

This has already caused Trump to rail against the “illegal” handing over of information by intelligence agencies – including the FBI – in a series of frustrated tweets.

It was not immediately clear why the FBI had released the dossier at such a potentially sensitive time, but it will now remind the US public of what in the 1970s was one of the biggest federal housing discrimination suits ever brought.

In October 1973, the Civil Rights Division of the US Justice Department filed a lawsuit against the Trump Management Company, and Donald and Fred Trump, alleging that African-Americans and Puerto Ricans were systematically excluded from apartments.

In a press release the Justice Department accused the company – which owned 39 buildings, containing a total of more than 14,000 apartments – of violating civil rights laws by: “refusing to rent and negotiate rentals with blacks, requiring different rental terms and conditions because of race, and misrepresenting that apartments were not available.”

Donald Trump, then just five years out of business school, responded in typically pugnacious style, holding a news conference at the New York Hilton in December 1973 and railing against the “outrageous lies” of the US government.

The Trumps retained Roy Cohn, former aide to Senator Joseph McCarthy, to defend them and counter-claimed against the government, seeking $100m in damages for defamation – with no success.

It was the first time Donald Trump had come to national prominence. He rejected all suggestions of racial discrimination and signed an affidavit saying: “I have never, nor has anyone in our organisation ever, to the best of my knowledge, discriminated or shown bias in renting our apartments.”

Instead, he accused the US government of trying to force the family company to lease apartments to people on welfare, arguing that if that happened: “There would be a massive fleeing from the city of not only our tenants, but communities as a whole.”

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The case ended with a settlement involving the Trumps signing a consent decree in June 1975.

This included the standard disclaimer that the settlement was “in no way an admission” of a violation" of the rules.

In his 1987 autobiography, Trump characterised this as: “In the end the government couldn’t prove its case, and we ended up making a minor settlement without admitting any guilt.”

Others, however, have interpreted things rather differently.

As reported by The Washington Post in January 2016, the Justice Department claimed victory, calling the consent decree “one of the most far-reaching ever negotiated”.

It explicitly barred the Trumps from “discriminating against any person in the terms, conditions, or privileges of sale or rental of a dwelling”.

It also ordered the Trumps to “thoroughly acquaint themselves personally on a detailed basis” with the Fair Housing Act. And it required them to place adverts telling ethnic minorities they had an equal opportunity to seek housing at Trump properties.