Accusations surrounding a minister's missing coat took up time in question period Tuesday, adding a bizarre twist to the issue of much-needed renovations on Parliament Hill.

A committee probing the awarding of the renovation contracts heard from a contractor that he hosted a riding association fundraiser attended by Natural Resources Minister Christian Paradis, then the minister of public works. Paradis' coat was allegedly stolen from the event, and an aide asked that its cost be reimbursed.

Montreal contractor Paul Sauve told the committee Tuesday that after the event, one of the minister's aides called and asked him for compensation for the coat -- to the tune of $5,400.

Sauve also alleged that his company was awarded a $9 million West Block renovation contract after he paid $140,000 to Gilles Varin, a businessman with Conservative ties. Varin has told the committee he only received $118,000.

Liberal Leader Michael Ignatieff pressed the government on Sauve's "explosive allegations" during question period.

"For a year now we've been trying to get to the bottom of this sorry affair, and now there are lurid allegations about the minister and his cashmere coat," Ignatieff said. "And the question I have is, why is this minister still in his job, and when will the prime minister tell Canadians the truth about this affair?"

The prime minister replied that the facts surrounding the awarding of the contracts "are very well known" and denied political interference in the process.

"In fact, the individual the leader of the Liberal party is quoting is an individual who lost the contract," Harper said. "As for the minister's coat, the minister had an $800 coat stolen. He reported that to the police."

The coat kerfuffle followed Sauve's testimony to a committee probing the awarding of the contracts in the massive renovation of the three, crumbling Parliament Hill buildings.

Sauve told the committee that he was "insulted, downright insulted to be asked to pay for a coat."

Sauve maintained he was asked for thousands of dollars to replace the coat, which he says he was told was from Holt Renfrew. However, receipts provided by Paradis' office show he paid $740.68 -- after a $150 discount -- for the coat and an umbrella from a store in his Thetford Mines, Que., hometown. A police report on the theft says the coat was valued at $900, but that included the cost to replace several keys that also went missing.

Paradis told reporters on Parliament Hill Tuesday he first asked the riding association, for whom the fundraiser was held, to reimburse him $400 for the coat. However, the association refused.

"When (the coat) could not be found, I asked to my staffer to the riding association if it was possible to have compensation because I had to change my locks, plus to take into account a portion of the value of the coat," Paradis said.

While the opposition questioned why Sauve was asked for $5,400, the Conservatives questioned Sauve's credibility.

Tory MP Chris Warkentin, who sits on the committee probing the contracts, said Tuesday Sauve is likely embarrassed that he paid $140,000 to Varin, who Warkentin said has no ties to any Tory MPs or staff at Public Works.

"This guy comes before a committee and says that there's a $5,400 coat that's missing, clearly that's not true. The minister has never owned a $5,400 coat, it was in fact a $600 coat," Warkentin told CTV's Power Play. "So that really calls into question much of what he said, especially when you see that there's inconsistencies on this point and several other points as well that he brought forward today."

Warkentin admitted that Sauve was originally awarded the West Block contract because his company was the lowest bidder and had years of experience completing similar work. A year after he got the contract, Sauve's company, LM Sauve, went out of business and the job was given to another company.

Liberal MP Geoff Regan, also a member of the committee, accused Warkentin of wanting to "have it both ways."

"On the one hand, he's said in committee, ‘Look, this is a credible company, this guy knew what he was doing, he got the contract because he deserved to get the contract. It was all very natural and proper,'" Regan told Power Play. "And on the other hand, he wants us to not believe him at all about what he's saying about how he got the contract. And he's telling us essentially that he got it because of kickbacks. And that's very troubling."

During his testimony on Tuesday, Sauve claimed that he hosted the riding association fundraiser in January 2009, months after being awarded the West Block contract, at the request of Varin and the riding association head Gilles Prud'Homme.

Sauve said he believed he had to host the fundraiser to show his gratitude for receiving the contract.

NDP MP Pat Martin said Sauve "couldn't have been more clear" about his allegations.

"In fact our worst fears are realized," Martin told Power Play. "He felt, in the construction environment he knows, in order to get this contract he had to pay a well-connected conservative lobbyist $140,000-plus dollars, and put on this cocktail party for them where the phantom coat seems to have been lost."

Martin said the committee has voted to halt all renovations on Parliament Hill until it determines whether the contracts were awarded fairly.

Committee chair and Liberal MP John McKay is expected to report to the House of Commons in a matter of days, after which all MPs will vote on the moratorium.

With files from The Canadian Press