Nick Clegg has admitted concerns over the behaviour Lord Rennard towards women were a factor in him stepping down as Lib Dem chief executive in 2009.
The deputy prime minister has previously insisted that the peer, who has been accused of sexually harassing women, left his job solely due to ill health.
However speaking during his weekly appearance on LBC Radio on Wednesday morning, Clegg said concerns about Lord Rennard's behaviour were "in the background" when he was moved from the job.
Clegg, who became Lib Dem leader in 2007 said he ousted Lord Rennard as chief executive of the party as the by-election guru did not share his "values".
The admission will raise questions as to why, if he was fired in-part for his alleged harassment of women, he was allowed to continue to play a senior role within the party including his election to the party's federal policy committee.
And according to The Times he has continued to play an active role in the selection and training of prospective MPs, including at the recent Lib Dem conference in September.
Clegg admitted this morning there were "some very serious mistakes and the women were not listened to and were let down".
"I so much believe that it is crucial that you treat people with respect and dignity in everything you do - and that is what I expect of people in the organisation I lead. That, clearly, did not happen here, to put it mildly."
Clegg said that when Lord Rennard was confronted over the allegations in 2008 he denied them - as he continues to do.
Addressing his decision to get rid of Lord Rennard, Clegg said: "Obviously this was all in the background, like any new leader of a political party I wanted to make sure the organisation refelcted my priorities my values. I felt it was a time for a change at the top of the professional party.
"His health was poor and that was the immediate reason why he left, but of course these things were in the background."
The deputy prime minister struggled to explain to listeners on his show what he knew and when he knew it about the allegations, saying: "I can only tell you the truth as I can recollect it now."
On Wednesday a female former Liberal Democrat MP said she told Nick Clegg about allegations surrounding the party's then chief executive Lord Rennard shortly after he became leader in 2007.
Clegg has said he heard only "indirect and non-specific concerns" about the Lib Dem peer until last week, when a Channel 4 News investigation alleged that he had behaved improperly towards women in the party on a number of occasions.
Sandra Gidley, who was MP for Romsey for a decade before losing her seat in 2010, yesterday said she hoped her comments would jog the deputy prime minister's memory about their conversation.
Asked by The Daily Telegraph whether she told Clegg "face-to-face" about the allegations, she replied: "Yes, that is true, but at this point I don't want to go any further. I am hoping his memory might be jogged. Shall we leave it at that?"