Tory MP Tim Yeo has stepped down as chairman of parliament’s energy and climate change committee following a sting operation involving Sunday Times reporters posing as representatives of a solar power firm.

In a statement, Yeo said that he was stepping down during an investigation by the parliamentary commissioner for standards into the allegations, after referring himself to the watchdog.

Yeo was caught on camera by the paper appearing to suggest that had coached a business associate on how to influence the committee. This morning, the committee announced that it has unanimously agreed that Liberal Democrat Sir Robert Smith will act as the interim chair.

Yeo’s statement said: “I firmly believe that I have not breached the MPs’ code of conduct in any respect and therefore await the outcome of the commissioner’s investigation with confidence.

“In particular I absolutely and unreservedly deny the allegation that I coached a witness with whom I have a business connection before that person gave evidence to the committee.”

Yeo went on to say that he did not want the incident to be a distraction from the work of the committee, which he said had been “extremely effective” over the past three years.

Sunday Times reporters, pretending to act on behalf of a fictitious South Korean solar energy company, filmed Yeo appearing to say that he had coached John Smith, the managing director of GB Rail Freight, on what to say during an appearance in front of the committee.

Yeo is a director of the company’s parent company Eurounnel, but has denied the claims and said that he did not ask questions at the committee due to his declared financial interests.

Yeo’s decision to step down temporarily followed criticism  from Gareth Thomas, Labour’s shadow cabinet office minister.

He said: “Tim Yeo has the right to defend himself but it is difficult to see how he can continue as chair of the select committee pending investigation by the parliamentary standards commissioner.”