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Vaz reportedly met two Eastern European men for sex at his London flat eight days ago and offered to pay for cocaine, although he said he did not want any himself.
The Home Affairs Select Committee, which is charged with examining the policy and administration of the Home Office, is currently overseeing a review of the UK's prostitution laws.
The money was paid in by a man connected to a diabetes charity called Silver Star, which was set up by Mr Vaz when he developed the condition six years ago.
There is no suggestion that the man knew the purpose of the payments, the Sunday Mirror reported.
In it he alleges that police took the images of child abuse found in Mr Smith’s car into the police station but the material has since disappeared.
Allegations and investigations into child abuse dogged Mr Smith’s career but no charges were ever brought.
The Met’s secretive Special Branch is specifically accused of tampering with an investigation that “would have revealed an MP to be involved in child sex offences”, as well as covering up a serving police officer’s involvement in a paedophile ring in north London.
Essex Police is implicated in only one allegation, which claims that officers did not investigate witness evidence that an MP was involved in child sex abuse.
Mr Proctor – who quit Parliament and pleaded guilty to acts of gross indecency relating to homosexual activity in 1987 – said he had never been to sex parties and had not been part of any ring involving cabinet ministers, MPs, or members of the military dating back to the 1970s.
He is said to have added: "I want a good time please."Mr Vaz is alleged to have asked the young men to bring poppers (amyl nitrate) to the flat, as well as allegedly joking about being a "pimp".
In an effort to conceal his identity, Mr Vaz told the sex workers that his name was "Jim" and that his job was selling "industrial washing machines."The Sunday Mirror reports that is has seen statements showing two cash deposits of £150 paid into an account following a string of text messages between Mr Vaz and one of the escorts discussing details of their meetings - including financial arrangements.
Claims that police attempted to cover up MPs’ involvement in child sex abuse dating back to the 1970s are being investigated.
The Independent Police Complaints Commission (IPCC) has announced 13 further investigations into allegations of historical corruption in the Metropolitan Police and Essex Police.