Journalist Dan Hodges has said Tom Watson should return Max Moseley's donations if an investigation finds the tycoon "has a case to answer" regarding evidence given in his 2008 High Court battle with the News of the World.
The former Formula 1 boss, a high-profile campaigner for press regulation, is facing scrutiny following the discovery of a racist election leaflet, published in his name in 1961, which reportedly linked "coloured immigration" to venereal disease and tuberculosis.
During his 2008 legal case against the News of the World, in which Mosley successfully sued the tabloid for its reportage of his sado-masochistic sex session with prostitutes, Mosley said he had no recollection of the 1961 document, adding that “If there was such a leaflet you would be able to produce it.”
Scotland Yard has confirmed it is investigating a dossier on Mosley, which includes the leaflet, but Watson, a fellow supporter of press restrictions, has so far rejected demands to hand back the £540,000 Mosley has donated to him.
Hodges said that, "were those investigations to prove Max Mosley does have a case to answer, at that point I think it would be untenable for Tom Watson to keep the money in those circumstances, given that the primary reason that he was getting the money supposedly was to promote these campaigns on accuracy in the press."
The journalist also said the investigation could undermine Mosley's stance against the press, as "this is not about protecting the ordinary people, it was always about protecting the powerful."
On Wednesday Mosley maintained that he does not recognise the document and any suggestion that he perjured himself was "obviously nonsense".
Watch Hodges' interview below.