After Lord Ahmed was accused of offering a 10m "bounty" for the capture of US President Barack Obama, the peer tells Channel 4 News the allegations are a "complete pack of lies".

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A newspaper in Pakistan quoted Lord Ahmed offering cash for the capture of Barack Obama and White House predecessor George W Bush at a reception in Haripur on Friday.

The Express Tribune said he spoke out in direct response to an American reward being offered for the capture of a prominent Pakistani radical.

Hafiz Muhammad Saeed founded the violent extremist group Lashkar-e-Taiba, which is blamed by India for the 2008 Mumbai terror attacks in which 166 people were killed. Labour moved swiftly to suspend the peer, pending an investigation.

"If these comments are accurate we utterly condemn these remarks which are totally unacceptable," a spokeswoman said. "The international community is rightly doing all in its power to seek justice for the victims of the Mumbai bombings and halt terrorism."

But Lord Ahmed complained that party chiefs had not spoken to him before announcing the move and challenged the party to produce evidence against him.

In an interview with Channel 4 News, Lord Ahmed continued to deny that he had called for a £10m bounty for the capture of US Presidents Obama and Bush.

I did not offer a bounty for the capture of Tony Blair and George Bush. I did not. This is a complete fabrication. Lord Ahmed

He said: "It is a complete pack of lies... I was talking about illegal war in Iraq, and the war crimes committed in Iraq and Afghanistan and International Criminal Court... In my opinion, I think Mr Bush and Mr Blair have been involved in an illegal war in Iraq outside the UN resolution. This is not a secret.

"I did not offer a bounty for the capture of Tony Blair and George Bush. I did not. This is a complete fabrication. They should be brought to justice, taken to court. But not "to capture"...that is completely different to taking them to justice, and to court. It was in the context that whatever it costs to bring people to justice then that should be done."

The direct translation from Urdu of Lord Ahmed's comments read: "America has just said that they will give a reward of $10m to anyone who arrests or hands over Hafiz Saeed. I am saying that even if I have to beg in Haripur, Pakistan, the US or Britain.

"Even if I have to beg I am willing to raise and offer £10m so that George W Bush and Tony Blair can be brought to the International Court of Justice on war crimes charges. Even if I have to sell my house I am ready to do it.

"The thing is that, if they are talking sensibly then I too am talking sensibly. The US has put pressure on Pakistan. To release this pressure I am are saying this. But the thing is, a political move should be countered with a political move."

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In the video above, Lord Ahmed said: America has just said that they will give a reward of $10m to anyone who arrests or hands over Hafiz Saeed. I am saying that even if I have to beg in Haripur, and the whole of Pakistan, the US or Britain. Even if I have to beg I am willing to raise and offer £10m so that George W Bush and Tony Blair can be brought to the ICC for justice on war crimes charges.Even if I have to sell my house I am ready to give it away. The thing is that, if they are talking sensibly then I too am talking sensibly. The US has put pressure on Pakistan. To release this pressure I am are saying this. But the thing is, a political move should be countered with a political move."