Nick Clegg has admitted that he knew of concerns about alleged harassment of women by a senior Liberal Democrat colleague.
The Deputy Prime Minister said his office had heard of "indirect and non-specific" claims about Lord Rennard's conduct in 2008, and "acted to deal with them".
"My Chief of Staff at the time, Danny Alexander, put these concerns to Chris Rennard and warned him that any such behaviour was wholly unacceptable," Mr Clegg said in a statement.
"Chris Rennard categorically denied that he had behaved inappropriately and he continues to do so. He subsequently resigned as Chief Executive on health grounds. As my office only received concerns indirectly and anonymously, as those involved understandably wanted to maintain their privacy, there was a limit to how we could take this matter forward following Chris Rennard's resignation."
Lord Rennard - a key party strategist and adviser to a succession of Lib Dem leaders before standing down due to ill health in 2009 - has said he is "deeply shocked" by the allegations, which he "strongly disputes" and regards as a "total distortion" of his character.
The Liberal Democrat leader said the allegations made on Channel 4 News last Thursday had been "extremely serious and distressing to the women involved", and he insisted: "It is critical they are investigated thoroughly and dealt with properly and they will be.
"But I would like to make one thing crystal clear. I did not know about these allegations until Channel 4 informed the party of them shortly before they were broadcast. I have today spoken to one of the women in the broadcast whom I respect and admire and who confirmed that she had never raised the issue with me. I am angry and outraged at the suggestion that I would not have acted if these allegations had been put to me.
"Indeed, when indirect and non-specific concerns about Chris Rennard's conduct reached my office in 2008, we acted to deal with them."
Mr Clegg said there were "legitimate concerns that issues raised with the party were not handled as well as they should have been". He said an independently chaired review would be held into Lib Dem procedures and how they were applied at the time.
A separate investigation will be carried out into Lord Rennard under the party's disciplinary process.