Ken calls truce after Boris accuses him of speaking "f***ing lies" during angry exchange

The Labour mayoral candidate claimed Johnson was channelling his earnings through a private company in a live debate on LBC 97.3.

But Johnson confronted Livingstone in a lift after the show and shouted: “It’s all f***ing lies, it’s all f***ing lies”. Sources said the mayor was “right up in Livingstone’s face” and was “visibly shaking with anger” when he began swearing.

Livingstone, who has come under fire for “tax dodging” in recent weeks, had accused Johnson of using “the same arrangements” for dealing with his media earnings. The Labour candidate has been dogged by claims he was paid via a company so he would only pay corporation tax at 20 per cent instead of income tax.

During the show, Johnson insisted Livingstone was telling “lies”, and said: “I have never used a company to minimise my tax. There was a TV production company which I was briefly a director of but I certainly never … I have always paid full income tax.”

Ken last night called for a truce with his mayoral competitor saying that the campaign had “gone into the stratosphere for all the wrong reasons” and they had “a duty to rein it in”.

“There is a danger that things are considerably out of hand” the former mayor added. “I suggest to Boris Johnson, therefore, that he and I work together to raise the tone of this election.

“Let us talk about what really matters to each and every Londoner and end the X-Factor slug-fest.”

Mr Livingstone went on to call for the candidates to shut down their “attack websites” in order to focus on more positive issues and “the priorities of Londoners”.

Johnson issued a statement after the broadcast, reiterating his rebuttal of Livingstone’s claims.

It read: “In relation to my business affairs and tax arrangements, specifically do I have any company or other arrangements constructed to enable me to pay less tax and do I, as has been claimed by the Labour mayoral candidate and the opposition leader, have the same arrangements as Labour’s mayoral candidate?

“The answer is simple and unequivocal in both cases. No.” He went on: “No income earned by me has ever been paid to a ‘service’ company, through which a person or person’s freelance earnings can be channelled so that they pay corporation rather than income tax.

“To suggest otherwise is a complete and utter fabrication. Of course, the real point is not about my tax arrangements. It is about the hypocrisy of a man who for years has railed against those who use special arrangements to reduce their tax and who has then been caught - bang to rights - doing the very same thing himself.”

A spokesman said Livingstone stood by the claims he made on the radio show, adding: “Boris Johnson lost his temper because he lost the debate - he talked about cable cars, not cutting fares and the squeeze on Londoners.”

Johnson and Livingstone will meet again on BBC’s Newsnight on Wednesday.