Rupert Murdoch's News Corp paid a US soldier a "substantial sum" to obtain pictures of Saddam Hussein in his Y-fronts, while a laptop containing evidence was "destroyed", an MP has claimed.
Speaking under parliamentary privilege, Labour's Chris Bryant told the House of Commons he believed those writing the story - which ran in the the New York Post and The Sun in May 2005 - "could possibly pretend that they did not know how that material was obtained and that criminality was involved in the process of securing the photo."
"For that matter, they could not possibly pretend not to know that the laptop on which the information and the photograph were kept was destroyed; I believe it was destroyed so as to destroy the evidence of the criminality," he told the Commons.
The Sun splashed the picture under the headline 'The tyrant's in his pants.'
The Labour MP, who was instrumental in revealing allegations of phone hacking at News International, said he had been given the information from "two well placed people inside News International."
Bryant also alleged that News International had stopped cooperating with the Met Police since May 2012.
"As soon as the water starts lapping a little bit higher, senior News International and News Corporation management chuck somebody else overboard—a newspaper and an editor," he said.
Labour MP Tom Watson, who also helped reveal the extent of phone hacking at the News of the World, interjected to ask Bryant if he had heard about allegations that journalists facing arrest in News International had been told that if they go to jail they would be "given their jobs back."
Bryant agreed, saying: "It would only be logical for journalists who currently work at News International to believe that what my honourable friend says will happen will happen because that is what happened before; people were given very large payouts on the understanding that they would plead guilty and have a tidy life when they came out of prison."
He added: “I urge the MSC [management and standards committee] to provide all the emails from Rupert and James Murdoch to News International staff as a matter of urgency.. in particular to the photo of Saddam other otherwise people will conclude in this country, that News International are still refusing to co-operate with the police."
The comments were made during as MPs debated the Leveson inquiry.
News Corp has previously admitted to paying for the picture, with a spokespersontelling The Guardian last month: "We didn't believe then, and certainly don't believe now, that it was wrong to acquire and publish newsworthy photographs of a notorious war criminal."
The Huffington Post UK contacted the Met Police but they have not commented on the allegations. News Corp deny their management and standards committee has not been cooperating with police.