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London mayoral candidate Ken Livingstone has denied claims he has not paid tax on his income, saying he is the victim of a "smear campaign".

Thethe Labour candidate's earnings were paid into a company meaning he paid corporation tax of 20% rather than income rate of 50%.

Mr Livingstone told ´óÏó´«Ã½ One's Andrew Marr show his tax affairs were in order as he employed a number of people.

He said he paid income tax on money he takes as salary.

The newspaper reports he has set up a personal company, called Silveta Ltd, to manage his accounts.

Mr Livingstone, who has campaigned against tax avoidance, told the Sunday morning show that he was "in exactly the same position as everybody else who has a small business".

"I mean, I get loads of money, all from different sources, and I give it to an accountant and they manage it.

"You pay corporation tax. If you then take out spending yourself, you have to pay more.

"What I am not doing is paying income tax on the money I use to employ other people."

The former London mayor said his two employees were his wife, who had spent hours in their attic typing up his autobiography and managed his media relations, and a researcher.

He said he earned money through after-dinner speaking and TV work and that in the last 12 months, he had paid the full rate of tax on his earnings of £55,000.

He added: "I am not off-shore. I am running a small company, just like hundreds of thousands of people.

"[It's] a smear campaign currently being run."