Scotland Yard will investigate reports that officers secretly bugged meetings which they held with murdered teenager Stephen Lawrence's friend Duwayne Brooks and his lawyers.
The BBC quoted a senior police source as saying authorisation had been given for two meetings between Mr Brooks, his legal representatives and investigating officers to be recorded.
A solicitor for Mr Brooks - who was with Mr Lawrence on the night he was killed in a racist attack in Eltham, south London, in 1993 - described the latest allegations as 'sinister' and called on the Met to come clean about its activities against her client.
It follows claims by former undercover officer Peter Francis that he was tasked with finding information to smear Mr Brooks or the Lawrence family and their campaign for justice for their son.
Scotland Yard confirmed that it had received a letter from Mr Brooks's solicitor, Jane Deighton, which had had been referred immediately to Deputy Assistant Commissioner Fiona Taylor, the head of its directorate of professional standards (DPS).
"An investigation into the circumstances of what took place has now been started by the DPS," it said in a statement.
"This investigation will seek to establish exactly what was authorised and what happened to any material which may have been gathered, in the context of the legal framework of that time."
The bugged meetings with Mr Brooks and his lawyers were said to have taken place in the offices of solicitors Deighton Guedalla in Islington, north London, in 1999 or 2000.
Ms Deighton, who was present at one of the meetings, said the police had asked for the meeting so they could brief Mr Brooks about the progress in the murder investigation.
They came after the Macpherson Inquiry into Mr Lawrence's murder concluded that the police treatment of Mr Brooks had been racist.
The murder investigation had been taken over by Deputy Assistant Commissioner John Grieve in an attempt to inject new impetus into the hunt for the killers.
Ms Deighton said she could see no reason for police to record covertly the meetings which they had themselves requested.
"There is absolutely no rational reason. That is very worrying for Duwayne Brooks and for ourselves because it is quite sinister," she told BBC Radio 4's PM programme.
"Why covertly record a meeting that you have asked for? Why unless it is part of something much bigger, why unless in fact covert recordings were happening of Duwayne Brooks and ourselves in different situations? That is what we want to know."
Mr Francis has previously said that information he gathered led to Mr Brooks being arrested and charged in October 1993 before the case was thrown out by a judge as an abuse of process.
Ms Deighton said that Mr Brooks now needed to know exactly what the police had been doing to him over the past 20 years.
"It does feel that there has been a persistent attempt from 1993 up to these meetings in 1999 - maybe even beyond - to undermine Duwayne Brooks's reputation. That is horrific," she said.
"Since he was 17, he has been haunted by the police seeking to undermine him, seeking to arrest and prosecute him and it has been up to the courts to defend him.
"He is now being haunted again by police wrongdoings, scattered over the last 20 years, that are emerging without warning and they are there to drag him down.
"It is a scandal that any individual should have to live through this for 20 years."
Earlier, Metropolitan Police Commissioner Sir Bernard Hogan-Howe said he would support a judge-led inquiry into the claims that police sought to smear the Lawrences and their associates, although he said the process could be lengthy and inconclusive.
Stephen's father Neville has demanded a judge-led investigation, dismissing as "completely unsatisfactory" home secretary Theresa May's announcement that Mr Francis's claims would be examined by two continuing inquiries.
Speaking on radio station LBC, Sir Bernard said: "If you do have a public inquiry, it can take a long time and it's not always conclusive at the end of it. Secondly, if there is more wrongdoing discovered, it still has to come back to the police or to the IPCC (Independent Police Complaints Commission) to investigate and prosecute.
"A public inquiry can decide who did what, but if you want to get into a criminal prosecution or a misconduct process, it still has to fall back to the police. You might end up having two parallel things."
Mrs May told MPs the allegations would be considered by the inquiry into the undercover operations of the Special Demonstration Squad in London in the 1980s and 1990s, being led by Derbyshire Chief Constable Mick Creedon under the oversight of the IPCC.
They will also be scrutinised by the review of alleged police corruption in the original Lawrence inquiry, which is being conducted by Mark Ellison QC.
Mr Francis claimed that, while infiltrating an anti-racist group in the 1990s, he was put under "huge and constant pressure" from superiors to "hunt for disinformation" to undermine those demanding a better investigation into the murder.
He also said he was told to withhold information about his activities from the Macpherson Inquiry.
London Mayor Boris Johnson spoke to Mr Creedon on Tuesday to seek assurances that he had "all necessary resources" and that Londoners "could be confident in the independence of the investigation".
He also spoke with HM Chief Inspector of Constabulary Tom Winsor, to ensure that a separate review he is conducting into current undercover policing practice had the scope to answer all of the questions raised by the latest allegations.
"The mayor is seeking assurances that current procedures are robust enough to stop anything like this happening in the Met today where undercover deployments may have been aimed at smearing victims' families and friends," the mayor's official spokesman said.
"The mayor believes restoring public confidence in the police is imperative to successful policing in the capital and the continued fight against crime."