Rachel Reeves has voiced support for former Labour deputy leader Tom Watson’s life peerage despite his role promoting Carl Beech’s false claims about a VIP Westminster paedophile ring.

The shadow chancellor acknowledged that Mr Watson was wrong about the case, but said she has “a lot of time” for him because of the “contributions” he has made to Parliament.

Mr Watson campaigned in support of Beech, a former NHS manager who wrongly accused several high-profile politicians and military officers of murder and child sex abuse in 2014.

He was wrong on that issue (promoting Beech’s claim), but he has made many contributions as a parliamentarian, as deputy leader of the Labour party, and he had been rewarded with a position now in the House of Lords.

An 18 month-long Metropolitan Police investigation into the case, known as Operation Midland, cost millions of pounds and resulted in no charges or arrests.

Tory ex-chancellor Lord Lamont told Parliament on Monday that elevating Mr Watson to the upper chamber was a “stain” on the House of Lords and an “absolute disgrace”.

Asked on Sky News about Lord Lamont’s comment the next day, Labour’s Ms Reeves said she has “a lot of time” for Mr Watson.

“Tom Watson has made a number of contributions,” she said.

“He was wrong on that issue (promoting Beech’s claim), but he has made many contributions as a parliamentarian, as deputy leader of the Labour party, and he had been rewarded with a position now in the House of Lords.

“But I’m not going to take any lessons now from Lord Lamont – the man who previously crashed our economy.”

Labour leader Sir Keir Starmer nominated Mr Watson for the peerage, something which the Prime Minister can veto, but has chosen not to.

The botched police inquiry into Beech’s allegations saw dawn raids on the homes of the late military chief Lord Bramall, the late Lord Brittan and former MP Harvey Proctor.

Lord Brittan, who served in Margaret Thatcher’s government, died aged 75 in 2015 before he was publicly cleared.

Beech, himself a convicted paedophile, was subsequently jailed for 18 years for making up a string of fabricated claims, including rape, torture and murder.