Black Country MP Tom Watson has defended his decision to accept donations of £540,000 from former F1 boss Max Mosley, following claims Mr Mosley published a leaflet stating non-white immigrants spread disease.

Mr Watson, Labour MP for West Bromwich East and Labour’s Deputy Leader, is under pressure to hand back the money, which was used to help pay his office costs.

Police are to look into claims that Mr Mosley published a campaign leaflet in 1961 which said: “Tuberculosis, VD and other terrible diseases like leprosy are on the increase. Coloured immigration threatens your children’s health.”

The election handout, unearthed by the Daily Mail in historical archives in Manchester, states that it was “published by Max Mosley”.

Tom Watson told the House of Commons that Mr Mosley did not hold the views contained in that leaflet.

He said: “If I thought for one moment he held those views contained in that leaflet of 57 years ago, I would not have given him the time of day.”

And he praised Mr Mosley for campaigning for better regulation of the press, saying: “He is a man though, who in the face of great family tragedy and overwhelming media intimidation, chose to use his limited resources to support the weak against the strong.”

The existence of the leaflet appears to contradict evidence Mr Mosley gave under oath in a High Court trial in 2008. At the time, he said it was “absolute nonsense” to suggest he had put out leaflets alleging that coloured immigrants brought diseases with them.

In a statement, Mr Mosley said he did not recall the leaflet which was “allegedly” issued more than 56 years ago.

“My record in motorsport demonstrates that I do not tolerate racism and, like most people, my political views have changed over time,” he said.

However, Labour leader Jeremy Corbyn’s spokesman told journalists this week that the party would accept no more donations from Mr Mosley.

Conservatives are now demanding Mr Watson repay the money. Conservative Party Deputy Chairman James Cleverly told London’s Evening Standard: “Tom Watson should seriously consider distancing himself from Mr Mosley and returning the money.”

And senior backbencher Jacob Rees-Mogg said: “He ought to pay it back with interest.”

Mr Watson issued a statement to the Daily Mail stating: “My views on press regulation are well known and have not changed. The views expressed by Max as a young man are not the views he holds now, just as the Rothermere family [owners of the Daily Mail] no longer uses its newspapers to support fascism.”

This was a reference to the first Lord Rothermere, the great grandfather of Jonathan Harmsworth, the current chairman and controlling shareholder of the company that owns the Daily Mail.

Mr Mosley, aged 77, has made no secret of the fact that as a teenager and young man he supported the far-right politics of his father, Oswald Mosley, who led the Union of British Fascists and later founded the far-right Union Movement. But he says he no longer holds such views.