NDP Leader Jack Layton was found in a massage clinic when it was visited by police in 1996, a report revealed Friday evening, though he was not charged with an offence.
The story, aired by the Sun News television station, comes on the final weekend before an election in which Mr. Layton's NDP has soared to second place in the polls.
Mr. Layton's wife, NDP MP Olivia Chow, confirmed the incident in a statement sent to media Friday night.
She said she had known that Mr. Layton had booked an appointment at a massage clinic at the time.
"No one was more surprised than my husband when the police informed him of allegations of potential wrongdoing at this establishment," she wrote. "He told me about the incident after it happened.
"Any insinuation of wrongdoing on the part of my husband is completely and utterly false," Ms. Chow maintained.
Mr. Layton spoke on the matter to reporters briefly Friday evening.
"It's unfortunate to see the smear campaigns starting in these last few days of the campaign," he said. "Absolutely nothing wrong was done, there's no wrongdoing here, but yet the smears start."
"This is why a lot of people get turned off politics and don't want to get involved," he added. "We'll keep pressing ahead with calling for real change in Ottawa, because frankly this is the kind of thing that a lot of people think is wrong with Ottawa politics today. So we're just going to keep up the campaign right through to the end and call for that change."
He did not take questions, and went immediately to a rally.
A spokesman for Michael Ignatieff said the Liberal Leader had no comment. Conservative Leader Stephen Harper also had no response.
Communications Director Kathleen Monk, at a hotel in Courtenay, B.C., before a campaign rally, noted that Mr. Layton has been through eight municipal and federal elections since the event in 1996.
"If it was a story, why is it only coming out 48 hours before an election?" she wanted to know.
The party's lawyer released copies of a letter it had sent to Sun News.
"The facts are that Mr. Layton had obtained a massage from a massage therapist, but had no knowledge whatsoever that the therapist's location may have been used for illicit purpose," Brian Iler said.
"He does recall being advised by the police at the time that he did nothing wrong, but that the location was questionable, and to be stayed away from. Mr. Layton gave the officer his name and address, and nothing further happened."
The letter goes on to warn media outlets not to go beyond the facts, as acknowledged.