Douglas Fraser: "I invite any Scottish politicians to write to me with a full confession of their wrong-doing"

With his homes in Monaco, South Africa and the French Riveria, a yacht, his own vineyard and private jet, Irvine Laidlaw is used to the good life. The son of a mill owner, from Keith, near Aberdeen, the Tory peer spent years building up the world's largest conference organising business, which he sold three years ago for nearly £770m.

Until this weekend, the 65-year-old was perhaps best known for his philanthropy, funding inner city and academies and youth projects for disadvantaged children in Scotland.

Yet yesterday, following a tabloid article featuring allegations of prostitutes, cocaine and a 22-year-old Vogue model, Scotland's fourth-richest man admitted he was being treated for sex addiction.

The article in a Sunday newspaper alleged Lord Laidlaw of Rothiemay flew prostitutes from Britain to a £6000-a-night hotel suite in Monte Carlo, where they drank champagne, before indulging in lesbian and bondage sex acts.

Lord Laidlaw said, in a letter to the newspaper, that he had not read the story "but the basis was likely to be correct". He added he was "deeply sorry for the embarrassment" caused to friends and colleagues, apologised "from the bottom of my heart" and confessed he should have been "stronger in resisting the temptations".

He disclosed how, with the help of his wife, Christine, he was receiving treatment for "sex addiction", a condition he claimed he had been suffering from all his adult life.

The Monaco-based peer is due soon to undergo six weeks of therapy in South Africa.

He added: "I am seeking long-term expert help, not to cure me, but to prevent any relapse into unacceptable behaviours. I am also planning to make a £1m donation to a UK addiction charity to help others in similar circumstances fight their addiction."

In the tabloid account, one of Lord Laidlaw's recent sex parties was said to have involved a 22-year-old Vogue model, three prostitutes, a male gigolo and a trilingual bisexual. Cocaine was made available but it was stressed the Tory peer did not take the illegal drug.

Over the years, the peer is said to have more or less single-handedly bankrolled the Scottish Conservatives and has loaned or donated Tory HQ around £6m. He is also one of the key benefactors to Boris Johnson's bid for the London mayoralty, having handed over £25,000 to the Henley MP's campaign to oust Ken Livingstone.

Labour vice-chairwoman Dawn Butler called on David Cameron to return the £6m or so the Conservatives have received from Lord Laidlaw.

The MP for Brent South in London said: "Everyone will be pretty appalled by this depraved and degrading treatment of prostitutes by the Tories' chief donor and the man bankrolling Boris Johnson's campaign.

"If they have any respect for the women of this country, I hope David Cameron and Boris Johnson will return the millions of pounds they have been given by Lord Laidlaw or hand over the money to a charity helping abused women."

Ennobled in 2004, when he gave an undertaking he would become tax-resident in Britain, Lord Laidlaw, still based in the Mediterranean, has fallen foul of the authorities and has taken a leave of absence from the House of Lords while he sorts out his tax affairs.

It is not thought there will be an early resolution to the dispute with Her Majesty's Revenue and Customs as there are calls for him to pay tax on his income since becoming a peer. However, this would involve paying tax on the profit made from the sale of his company; the bill is estimated to be around £50m.

His long-term survival in the Lords is in doubt. Although there are two private members' bills - one in the Commons and one in the Lords - aiming to secure a ban on MPs and peers who are tax exiles, these are likely to get nowhere but the UK Government is considering whether to include such a proposal in its own forthcoming Constitutional Reform Bill.

The peer has a love of fast boats, fast cars and helicopters. As well as his £3m home in Monte Carlo, he has a £4m vineyard on the French Riviera, a £10m estate near Capetown, a £2m home in London's Eaton Square, a mansion in Scotland and a £14m home in Hampshire, which is up for sale.

He founded the Laidlaw Youth Project and has funded inner city academics and youth projects for disadvantaged children in Scotland.

Lord Laidlaw has said that he intends to give away much of his wealth in the future. But his last £1m donation to charity for the treatment of sex addicts is likely to gain the biggest publicity.

In his statement, he said: "Sexual addiction is comparable to the other, better known addictions such as drug, alcohol and gambling. Many people suffer different types of this disease. There is no cure for it and self-help is rarely successful. But having an addiction is not excuse for my behaviour ... I hope that, in time, people will be able to understand and forgive me as I fight this difficult, personal battle."