Lord Hain has said it was the “right thing to do” to name Sir Philip Green as the businessman linked to an investigation into sexual and racial harassment by the Daily Telegraph.

The Labour peer used parliamentary privilege to name Sir Philip as the figure behind a court injunction preventing the newspaper from identifying him in connection with the allegations.

Speaking on BBC Newsnight on Thursday, Hain said: “I considered it extremely seriously before I said it.

“I’m not disputing judges’ responsibilities or timing or anything like that. That’s a matter for the judiciary,” he said.

“I’m just charging my function as a parliamentarian – and what concerned me about this case was wealth, and power that comes with it, and abuse.

“And that was what led me to act in the way that I did.”

Sir Philip, whose company Arcadia owns Topshop, Topman and Miss Selfridge, did not comment on Hain’s actions but “categorically and wholly” denies the allegations.

But Hain’s action to name the billionaire has also drawn criticism, including from one barrister has accused the peer of “trespassing”. Hugh Tomlinson QC told BBC Radio 4′s World Tonight programme: “Parliament can’t trespass into areas of the courts and say we think the courts have got it wrong – and that’s what Lord Hain is effectively doing.”

The Telegraph on Wednesday revealed a “leading businessman” had won a legal battle to stop the paper publishing details of harassment allegations made against him. The paper said it spent eight months investigating sexual harassment, bullying and intimidation claims made against the 66-year-old.

Judges said five staff making the claims had been compromised by non-disclosure agreements (NDAs) and received “substantial payouts” to stay silent.

In the article, titled “The British #MeToo scandal which cannot be revealed”, the paper wrote: “The accusations against the businessman, who cannot be identified, would be sure to reignite the #MeToo movement against the mistreatment of women, minorities and others by powerful employers.”

“As well as re-igniting the #MeToo debate, the gagging of the Telegraph is expected to renew controversy about the use of injunctions to limit British press freedom.”

A Labour peer and former Cabinet minister, Hain told the House of Lords on Thursday: “Having been contacted by somebody intimately involved in the case of a powerful businessman using non-disclosure agreements and substantial payments to conceal the truth about serious and repeated sexual harassment, racist abuse and bullying which is compulsively continuing, I feel it’s my duty under parliamentary privilege to name Philip Green as the individual in question, given that the media have been subject to an injunction preventing publication of the full details of a story which is clearly in the public interest.”

Speaking to The Guardian, Green said: “To the extent that it is suggested that I have been guilty of unlawful sexual or racist behaviour, I categorically and wholly deny these allegations.

“[Topshop parent group] Arcadia and I take accusations and grievances from employees very seriously and in the event that one is raised, it is thoroughly investigated.

“Arcadia employs more than 20,000 people and in common with many large businesses sometimes receives formal complaints from employees. In some cases these are settled with the agreement of all parties and their legal advisers. These settlements are confidential so I cannot comment further on them.”

Theresa May on Wednesday said she would bring forward a consultation which seeks to “improve the regulation around NDAs and make it absolutely explicit to employees when an NDA does not apply and when it cannot be enforced”.

Meanwhile, Liberal democrat leader Sir Vince Cable is leading calls for the retail tycoon to be stripped of his knighthood. “He narrowly and luckily escaped losing his knighthood over the pensions scandal [involving BHS]. If these allegations are correct, he should certainly be stripped of his knighthood,” he said.

MPs voted to strip the magnate of his knighthood in 2016 after the chain BHS went bust one year after he sold it for £1 to Dominic Chapell. The pensions of some 19,000 workers were put at risk.

Frank Field, chairman of the House of Commons Work and Pensions Committee who led condemnation of Sir Philip over his treatment of BHS pensioners, said: “The charge sheet against the knighthood is growing.

“Parliament and the country have made their views clear on this matter. Ultimately it’s a decision for the Honours Forfeiture Committee.”

The Birkenhead MP said he would now push for the creation of a new procedure allowing MPs to raise abuse cases in Parliament.

“This would develop the role of the House of Commons in a way which stands up for people who have little money, against those who have much.”