Baroness D’Souza, the speaker in the Lords, said: "Today’s revelations about the behaviour of Lord Sewel are both shocking and unacceptable. Lord Sewel has this morning resigned as Chairman of Committees.
"The House of Lords will continue to uphold standards in public life and will not tolerate departure from these standards.
"These serious allegations will be referred to the House of Lords Commissioner for Standards and the Metropolitan Police for investigation as a matter of urgency."
PRWeek contacted the House of Lords press office. A press officer for the Lords said he could not comment further due to a potential police inquiry.
Sewel has since resigned from his role as deputy speaker.
A spokeswoman for the Metropolitan Police said: "We are aware of the story in The Sun on Sunday, 26 July, relating to alleged Class A drug use at an address in Westminster. Any allegations will be investigated."