Lord John Sewel resigned as deputy speaker of parliament's upper house after a sting in The Sun newspaper yestreday (July 26) but remains under pressure to stand down from the chamber altogether.
Parliamentary authorities have called in the police after the tabloid released footage showing him partying semi-nude with two women and snorting a white powder, alleged to be cocaine.
The video showed the married 69-year-old father sniffing powder from a woman's breasts with a five-pound (B250) note.
The former government minister is also seen relaxing in an orange bra and leather jacket belonging to one of the prostitutes in a picture published today.
Lord Speaker Baroness Frances D'Souza said the matter would be passed on to police, saying the "revelations about the behaviour of Lord Sewel" were both "shocking and unacceptable".
"These serious allegations will be referred to the House of Lords Commissioner for Standards and the Metropolitan Police for investigation as a matter of urgency," she said.
If he is found to have breached the code of conduct, Lord Sewel could become the first peer to be expelled from parliament under rules he helped to introduce.
In the video, Lord Sewel is heard discussing the allowance he gets as a peer and telling the two women: "it pays for this".
A former lecturer, Lord Sewel was appointed to the House of Lords since 1996 and served as a junior minister in the Scotland office under the Labour government of prime minister Tony Blair.
Labour lawmaker John Mann called for Lord Sewel to retire from the Lords immediately to save himself "further embarrassment".
"He chaired the committee that makes the decisions on discipline," the member of the lower House of Commons said.
"He cannot possibly go in front of his own committee and expect a serious hearing He is a disgrace. He should retire and resign immediately."