Andy Burnham, who is currently polling third in the Labour leadership contest, is to report The Sun newspaper to press regulator Ipso after a reporter, posing as a donor, recorded the Leigh MP saying Jeremy Corbyn would be a disaster for the Labour Party.

The sting could be potentially damaging for Burnham, who is expected to seek a position in the shadow cabinet if Jeremy Corbyn wins the leadership contest, as is expected, on Saturday.

"Privately, it is a disaster for the Labour party. I mean, publicly, he is a nice man, a nice individual. He believes in the things he campaigns on so he's not a fraud in any way. But I think the public will think Labour has given up on ever being a government again," Burnham told The Sun, inadvertently.

The Murdoch-owned tabloid has been openly hostile to Burnham in the past. The Guardian claimed the former minister for culture, media and sport was targeted because of his refusal to forgive the Sun over its controversial coverage of the Hillsborough disaster.

"Our routine due diligence threw up a number of discrepancies and as a result, the cheque was never cashed."

- Andy Burnham spokesman

In the sting for which Burnham is reporting The Sun, a journalist posing as a foreign donor paid £5,000 to a second party donor Faiz ul Rasool to arrange the meeting with Burnham. The journalist, calling himself Mr Arshad, attended a reception at Labour Party headquarters where he met with the Labour leadership contender.

The Sun reported a donation of £3,000 was made at the reception by someone posing as 'Arshad's' British wife.

Andy Burnham's team has refuted any accusation of wrongdoing, saying: "Faiz ul Rasool has had no role, formal or informal, within the Burnham campaign. He made a donation in July of £5,000, which was declared in accordance with standard compliance rules.

"Arshad was not invited to the reception held at campaign HQ on Monday evening and the event organisers were not notified that another guest was planning to bring him along. He asked for a photograph next to Andy, with people he claimed were his wife and baby.

"During the event, Arshad – who was not introduced under that name – presented an unsolicited cheque to a campaign staffer in the names of Mr A Ali and Miss N K Khan. Our routine due diligence threw up a number of discrepancies and as a result, the cheque was never cashed."