Sackcloth and ashes? For George, it was always Boss and Bollinger

George Galloway was sitting in the study of his house in the Algarve on Monday afternoon, working on his new book about Iraq, when his telephone rang.

It was a reporter from The Daily Telegraph who, by coincidence, wanted to discuss the very subject Mr Galloway had been writing about: the persistent allegations that he had personally profited from his long association with Iraq.

Citing documents allegedly found last week in the Iraqi Foreign Ministry in Baghdad, the journalist asked whether the man known as the MP for Baghdad Central could confirm that he had been paid about £375,000 a year from Iraq's oil revenues. And whether he would admit telling an Iraqi spy that he needed their "continuous financial support".

Mr Galloway put down his pen and, with his usual brio, went on the counter-attack. He accused the paper of "preposterous" ideas, hinting that the documents allegedly discovered may in fact have been forged by the newspaper.

When the Telegraph went ahead and splashed the story across its first five pages yesterday, Mr Galloway's only consolation was regarding the photograph of his Palestinian wife – who is currently under siege from the press at her London home. "At least that was a nice picture of her in the Telegraph," he said.

Mr Galloway's relaxed response is not surprising for a man who has grown used to controversial stories on his lifestyle and ties with murky Middle Eastern figures.

The MP for Glasgow Kelvin was vilified in the press after meeting Saddam Hussein last year, where he revealed in his weekly column in The Mail on Sunday that the Iraqi dictator offered him Quality Street chocolates even as he expressed his admiration for London buses.

Mr Galloway was one of the first MPs publicly to shake hands with Gerry Adams and has dined with Fidel Castro and Yasser Arafat, whose photographs adorn his office in the House of Commons, alongside a letter from Harold Pinter saying "fuck 'em" and a display of daggers from a Kathmandu asylum-seeker.

With his fondness for expensive Cuban cigars, designer suits and a perma-tan, the 48-year-old MP has done little to shake off his other nickname, Gorgeous George. There have been tales of dalliances in Cuba and Greece, where he admitted returning from a business trip with "carnal knowledge" of more than one woman, even though he was married to his first wife at the time.

"I haven't been for some time to Cuba, since the News of the World plastered the Five Times a Night Under the Stars story," he said. "It was quite a funny story. My wife knew it couldn't be true when the lady claimed I had done it five times a night."

These days he is happily married to a Palestinian biologist, Amineh Abu-Zayyad, who is 12 years his junior. In his House of Commons office he employs two glamorous young Palestinian researchers who – when they are not sorting out his parliamentary business and bundling up the hate mail and death threats – buy his Kenzo suits and Hugo Boss ties. "I send my staff out to shop, that's why the clothes are so nice," he says. "I have very trendy and beautiful women working with me. I just give them the money. I have never believed in sackcloth and ashes."

But Mr Galloway's insouciance only goes so far and he is not slow to defend his reputation in the courts – previous libel actions have earned him an estimated £250,000 including a £150,000 payout from Robert Maxwell's Mirror group, which he spent on a red convertible Mercedes sports car.

Yesterday he instructed the firm he always uses, Davenport Lyons, to issue a writ against the Telegraph.

Mr Galloway was the son of a politically active Dundee teacher and attended one of Scotland's best grammar schools. After an early working life of drudgery in a Michelin tyre factory, he took up local politics in Dundee and by the age of 26 became chairman of the Scottish Labour Party.

With his energy and recognised skill as an orator, there was even talk of his becoming a leader of the party but his interests subsequently moved elsewhere.

Mr Galloway's obsession with Arab affairs began by chance when a Palestinian wandered into the Labour office in Dundee where he was working as a 19-year-old and began chatting to him.

Now, 29 years on, he travels regularly to Baghdad and even refused – in an interview with The Independent – to condemn Palestinian suicide bombers.

In his living room in Glasgow he has both the BBC and the Arab satellite station al-Jazeera playing, and he freely blames all Israelis for the occupation of Palestinian lands. "Israel illegally and violently occupies the Palestinian territories, and it is a legal and moral right and duty of people under foreign occupation to resist it," he says.

For some time now Mr Galloway has been the Labour Party's number one irritant, and he provocatively employs a terrorist metaphor to illustrate his disaffection with the Labour leadership. "Brown and Blair are amongst the hijackers who have taken over control of the plane and the passengers are going to have to fight them to try to get back into the cockpit," he says. "If they can't, then they face the choice of flying to destruction with the hijackers or getting out of the plane. Either the Labour Party members take back control of the plane ... or they will have to get out of the plane."

But last month, when he accused Tony Blair and George Bush of being "wolves" attacking Iraq and suggested British troops disobey "illegal" orders, the party set in motion plans to remove him as an MP. Typically Mr Galloway, who has been a Glasgow MP since 1987, is defiant about plans to deselect him and says he will "fight them all the way", pledging to stand as an independent if he is thrown out of the party.

He remains contemptuous of Mr Blair's "love affair" with President Bush and of the ministers in his Cabinet – such as Alan Milburn and John Reid – whom he remembers from his early years in politics as hard-left activists.

But Mr Galloway finds no contradiction in dining with members of Saddam Hussein's Baath party while condemning former lefties in his own party.

During the visit to Baghdad where he is alleged to have met an Iraqi intelligence agent to solicit funds, he spent Christmas at the home of the Iraqi Foreign Minister, Tariq Aziz.

"I spent all of Christmas Day with Tariq Aziz. I well remember spending Christmas in Baghdad," he says. "I spent the whole day in his house."

Mr Galloway's recent call for British troops to lay down their arms in Iraq has led The Sun to start a legal action against him for treasonable behaviour or "incitement to disaffection".

But the prospect of such a challenge seems, perversely, to delight him. "After a long life I hope to have chiselled on my gravestone 'He incited them to disaffection'," he says.