Scotland’s first minister Alex Salmond has alleged that the Observer newspaper accessed his bank account in 1999.

Giving evidence to the Leveson Inquiry, Salmond said he was told this by a former journalist on the Guardian’s sister paper.

“The person concerned had detail which could only have been known by somebody who had full access to my bank account at that stage,” Salmond said.

Salmond said that, in conversation with the journalist, the reporter said his colleagues had wondered whether a toy shop Salmond had been to was more than a conventional store. The Scottish first minister clarified he had bought toys for his nieces at the shop in question.

In a statement released this afternoon, Guardian News & Media said Salmond had first raised the issue with the Observer’s editor last year, and the publisher has since been “unable to find any evidence to substantiate his allegation.”

“As our response to him at the time made clear, we take this allegation very seriously and if he is able to provide us with any more information we will investigate further,” the publisher said.

Elsewhere in his evidence, Salmond defended press freedom, arguing that he felt people had a right to offensive “within the law”.

He told Lord Justice Leveson that if his Inquiry were to come up with a proposition for press regulation that “accords with public support, is eminently sensible and points the way to a better future then the Scottish parliament would be foolish not to pay attention to it.”

But he added that the Scottish parliament might “wish not to apply” any over-prescriptive solutions.

When discussing whether or not he was in support of News Corp’s bid for the full takeover of satellite broadcaster BSkyB, Salmond emphasised the broadcaster was a “huge employer in Scotland” and that he was in favour of what benefited the Scottish economy.

Salmond stressed that his responsibility was ensuring investment and jobs in Scotland, rather than overseeing media plurality or broadcasting.

The Inquiry continues tomorrow with evidence from prime minister David Cameron.

Follow Index on Censorship’s coverage of the Leveson Inquiry on Twitter – @IndexLeveson