Lib Dem officials had spent three days insisting Clegg had not known about the complaints over behaviour of the former party chief executive and strategist Lord (Chris) Rennard, which were made on Channel 4 news on Thursday.
On Sunday Clegg returned from a family holiday in Spain to make his first public statement on the controversy, in which he said that he had not known about the Channel 4 "allegations" but was made aware of "indirect and non-specific concerns" in 2008.
Clegg said he responded by asking Danny Alexander, then chief of staff and now chief secretary to the Treasury, to talk to Rennard and warn him such behaviour would be "wholly unacceptable". The deputy prime minister added: "Chris Rennard categorically denied that he had behaved inappropriately and he continues to do so."
Clegg also appeared to bow to growing criticisms over the party's original plan to hold two internal inquiries into the complaints, saying that the investigation into how the allegations were handled, which was to have been led by party president, Tim Farron, would now be "independently chaired".
Rennard, 52, who resigned as chief executive in 2009 on the grounds of ill health, has strongly denied the claims.
Clegg was first personally drawn into the row when the Mail on Sunday reported about Facebook messages, in which one woman claimed that "Nick knows" – a reference, suggested the newspaper, to the allegations about Rennard.
Sunday's statement thrust the deputy prime minister into the heart of the controversy and prompted questions about his leadership.
The former Lib Dem MP Lembit Opik told Sky News: "Nick Clegg is in an increasingly difficult position because this isn't how a leadership office should be behaving."
There was little sympathy either from the Lib Dems' coalition partners in the Conservative party. The Tory MP Connor Burns told Sky: "It's shambolic. If this is so important and compelling it now needs two inquiries why did it not need even one inquiry when it was first brought to light? It raises questions about Nick Clegg's competence and judgment."
In his statement, Clegg said: "I would like to make one thing crystal clear. I did not know about these allegations until Channel 4 informed the party of them shortly before they were broadcast. I have today spoken to one of the women in the broadcast who I respect and admire and who confirmed that she had never raised the issue with me.
"I am angry and outraged at the suggestion I would not have acted if these allegations had been put to me. Indeed, when indirect and non-specific concerns about Chris Rennard's conduct reached my office in 2008, we acted to deal with them.
Revealing that the inquiry into the party's response would now be independently chaired, alongside a second inquiry into the allegations themselves, Clegg added: "I am absolutely determined that both these investigations will be carried out thoroughly and comprehensively. These investigations may well reveal flawed procedures, and clearly the women concerned feel they were not properly listened to. But I totally reject the insidious suggestion that my office or I are responsible in any way for a deliberate cover up.
"The full truth of what happened and what failed to happen and who said what to whom will be revealed by these investigations.
"But in the meantime, I will not stand by and allow my party to be subject to a show trial of innuendo, half-truths and slurs. The important thing is that we respect the women who have come forward and do everything to get to the truth. That is what will now happen." Clegg's statement contrasts with those by other senior Lib Dems: in separate public appearances business secretary, Vince Cable, energy secretary, Ed Davey, and Home Office minister, Jeremy Browne, all said they had no knowledge of the allegations before they were aired by Channel 4, who interviewed several women, including at least two who are still well known in political circles.
Cable denied "absolutely" on the BBC1 Andrew Marr programme he had known of the claims, adding: "Nick Clegg has also said he wasn't aware of these allegations until they appeared on television last week." On Sunday night Cable insisted he stood by his earlier statement that he did not know about the specific allegations or wider rumours.
Others suggested concerns about Rennard were widely known in the party. Stephen Tall, co-editor of the influential Lib Dem Voice website, admitted: "Like many in the party I'd heard rumours along the lines of those which have now surfaced against Chris Rennard for years. I'd always hoped they were untrue."
Earlier Tall also joined other critics of the two Lib Dem inquiries, arguging that having reviews dominated by party members was an "inadequate response". Tim Gordon, the Lib Dem chief executive, has said the specific allegations of inappropriate sexual behaviour by Rennard would be conducted by five party members, including three women and experts in the law and human resources. Claims the party did not react years ago when the allegations were first made will be examined by another group led by Farron and will include non-party members. Tall said he had written to Farron saying it would be hard for the president to "ask questions that need to be asked" of fellow MPs who it has been reported were told about the allegations and were in positions to act on them. "It needs to be someone outside the party," wrote Tall. "At the very least it needs to be someone outside the parliamentary party."
The Lib Dem response was also criticised by Harriet Harman, Labour's deputy leader, who told the Andrew Marr Show: "When are we ever going to learn that when allegations are made against people in top positions they must not be swept under the carpet. The organisation gathers around them, rather than really holds them to account."
Rennard's lawyers have issued a statement on his behalf, saying he strongly disputed the allegations.
"Lord Rennard is deeply shocked by and strongly disputes the allegations made against him in the Channel 4 News broadcast on 21 February. He regards the report as a total distortion of his character," it said.
"Not a single complaint of misconduct was made against him to his knowledge during the 27 years he worked for the Liberal Democrat party. Despite the claim made by one woman in the report, Lord Rennard continued working closely with her for 10 years after the alleged event described."
The controversy comes as the Lib Dems prepare for a major byelection in Eastleigh on Thursday, in which the party faces a tough task holding on the seat vacated by Chris Huhne, who resigned after pleading guilty in court to perverting the course of justice after he asked his wife to take speeding points for him a decade ago. If the party loses the south coast seat, it would be its first byelection defeat for many years.
In Eastleigh the Lib Dem candidate Mike Thornton and Davey, who was helping him campaign, on Sunday denied the revelations would affect the byelection, which they claimed was dominated by local issues. "On the doorsteps in Eastleigh people are responding very positively to the Liberal Democrat message," said Davey. "The internal issues are not featuring here."
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