Benoit Labonte is spreading rumours and hearsay when he says governing-party workers ran a kickback scheme, Mayor Gerald Tremblay said in a sharp response to his disgraced ex-colleague's bombshell interview.

Tremblay said Labonte, recently thrown out of the opposition Vision Montreal party, should go to the police if he has solid proof of fraud in city politics.

In an interview with Radio-Canada broadcast on Thursday, Labonte claimed a worker for the mayor's Union Montreal party routinely collected kickbacks from businesses before handing out public works contracts.

Labonte alleges the party worker charged three per cent of the contract's value. The money was pocketed by elected officials, said Labonte.

"I cannot give you the names ... "I'd be sued," he said.

Labonte also said he confronted Tremblay about the kickbacks while he was a member of the mayor's party a few years ago. The two later had a bitter falling out.

Tremblay fires back

Tremblay, addressing reporters on Thursday evening, acknowledged that Labonte did confront him about kickback allegations, but that they were groundless.

"I verified those rumours and that hearsay and I found no relevant fact to support what he said."

The mayor added that Labonte has no credibility, especially since he admitted in the Radio-Canada interview that he lied about taking money from construction magnate Tony Accurso.

Labonte at first denied allegations that he had taken $100,000 from Accurso to fund a Vision Montreal leadership bid in the spring of 2008. Accurso's involvement in a massive Montreal water-meter contract led Tremblay to cancel it amid fraud allegations.

Widespread corruption?

Labonte says his actions are but the tip of the iceberg, and that politicians at the provincial and municipal level routinely take cash under the table.

"The entire political class is aware of it," said Labonte.

"It's a fact of life."

Labonte, the former opposition leader who was once a member of Tremblay's team, says big campaign injections from companies are the norm.

Quebec electoral law forbids the practice, but Labonte says money is usually divvied up into personal cheques to appear as if they're individual political contributions.

He also says the practice is well known at Vision Montreal leader Louise Harel, who fired him over the weekend amid the financing allegations.

"She admitted that it was done everywhere, that it was even done in the PQ," said Labonte, referring to the separatist party in which Harel once served as a cabinet minister.

Talk of inquiry

Labonte says he'd be willing to take the stand if there's ever an inquiry into political corruption and the construction industry.