A Labour peer who used parliamentary privilege to accuse Sir Philip Green of being an abusive bully has said he did so after hearing “horrible” claims of repeated sexual assaults resulting in hundreds of grievance cases.

Peter Hain told the House of Lords on Thursday that one alleged victim claimed the retail tycoon had shouted “go to psychologists” at staff who questioned his behaviour.

A company lawyer working for one of Green’s firms was accused of lying to the alleged victim, according to Hain.

His latest disclosures came during a debate about the use of parliamentary privilege – which allows MPs and peers to speak in parliament without fear of legal action – and the obligation under the rule of law to obey court orders.

The debate was prompted by Hain’s decision in October to name Green, who had secured an injunction preventing details of the case from being revealed. Green has denied all accusations of wrongdoing.

It comes the day after Green’s Arcadia Group confirmed plans to close 23 stores.

Hain’s intervention followed days of speculation over a mystery businessman described by the Daily Telegraph as being the subject of multiple sexual harassment and bullying allegations.

Hain, who was a cabinet minister under Tony Blair, told peers he would reveal what he was told by one alleged victim of Green who had “pleaded” that he be named.

“I quote: ‘He was touching and repeatedly slapping women staff’s bottoms, grabbing thighs and touching legs. Hundreds of grievance cases were raised with HR [human resources]. The company lawyer who interviewed me then lied. Sir Philip screamed and shouted at staff to go to psychologists,’” Hain said.

The former anti-apartheid campaigner was criticised at the time for naming Green, as some lawyers and legal experts said it was an abuse of parliamentary privilege, although he was backed by many MPs.

Hain claimed that the alleged victim said those who took their complaints to an employment tribunal ended up settling after signing non-disclosure agreements (NDAs).

Hain said the woman told him: “Some were worn down with spiralling legal costs costing them a fortune. He broke some in the end. It was horrible … He is still doing exactly the same thing. It is rife, it happened all the time. I saw him grab the breasts of others. This has gone on for a long time.”

He told peers he was acting against Green’s alleged behaviour and the misuse of NDAs. “My motive was to stand up for ordinary employees against a very powerful and wealthy boss who, as described to me, seemed to think he was above the rules of decent respectful behaviour,” he said.

The former supreme court justice Lord Brown of Eaton-under-Heywood told fellow peers that in his original decision to use parliamentary privilege to name Green, Hain “acted wrongly” and parliament should try to prevent such an “abuse” recurring.

He said of Hain’s actions: “I regard his statement as a misuse, indeed, I would suggest, a clear abuse, of privilege.”

Green said it was outrageous for Hain to have named him. He repeated that “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”.

It later emerged that Hain was a paid adviser to Gordon Dadds, the law firm instructed by the Daily Telegraph in its attempts to name Green. Green also criticised Hain for not revealing his links to the law firm.

Hain told the Observer in February he took the decision to name Green “in my personal capacity as an independent member of the House of Lords. I categorically state that I was completely unaware Gordon Dadds were advising the Telegraph regarding this case.”

Last month, the House of Lords’ standards watchdog dismissed a complaint by Green against Hain for using parliamentary privilege.