Evidence from an undercover reporter known as the 'Fake Sheikh' has been challenged by his former editor at the Leveson Inquiry today.

Mazher Mahmood, whose image was not broadcast to protect his identity, was questioned over his resignation from the Sunday Times in 1988. A written statement from Roy Greenslade, managing editor of the paper at the time, was read out to the inquiry.

An article written by Mahmood in 1988 reported that a chief inspector, convicted for drink driving, had been demoted to constable rather than inspector.

The journalist claimed the error had been made by a news agency supplying the story, but was later found to have covered up his mistake by altering the original copy. He told the inquiry he regretted his actions and realised he had acted improperly.

He added: “I had a series of run-ins with Mr Greenslade while at the paper… I foolishly thought the best thing was to cover my mistake, it was the wrong thing to do and I resigned."

Greenslade responded on Twitter: “Mahmood #Leveson Continues to say I had disagreements with him at Sunday Times - Can't remember one. Treated him same as other reporters [sic]."

David Barr, junior counsel to the inquiry, asked Mahmood why he was not forthcoming on the “act of dishonesty” when appearing before Lord Justice Leveson in December 2011.

Mahmood replied: “It wasn’t a highlight of my career, obviously, it wasn’t something that I elaborated on."

He said a claim made by Michael Williams, former news editor at the Sunday Times, was “completely untrue”. Williams said a reporter, believed to be Mahmood, offered a financial bribe to staff to falsify his copy in an article written last year.

Mahmood added: “It's a completely untrue allegation. Can I point out that Mr Williams also left the Sunday Times under something of a cloud."

Mahmood, who now works as an investigative reporter for the Sunday Times, was employed by the News of the World until its closure last year.