Labour MP Keith Vaz paid for the services of male escorts, the Sunday Mirror has reported.
The married father-of-two paid for the men to visit him one evening last month at a flat he owns in London, it claims.
The Leicester East MP, 59, said he was referring the claims to his solicitor.
Several newspapers report that Mr Vaz is to step down as Home Affairs Select Committee chairman but he has not confirmed this, saying he will tell the committee his plans first on Tuesday.
According to the Sunday Mirror, Mr Vaz's meeting with two male escorts included a discussion about using the party drug known as Poppers.
Mr Vaz had opposed government attempts to criminalise the drug. Ministers later announced they would remain within the law.
His committee is also currently overseeing a review of the UK's prostitution laws.
When asked about the allegations, shadow health secretary Diane Abbott said: "I've known Keith for over 30 years. I think this must be a dreadful time for him and his family - his wife and his two children - and I'd rather not comment."
Conservative former Culture Secretary John Whittingdale said it was right for Mr Vaz to temporarily step aside.
"Keith Vaz, as I understand it, has said he will stand aside from the chairmanship and, given the areas for which the committee is responsible, that does seem to me to be a sensible course of action."
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