Benoît Labonté says the RueFrontenac.com article is full of 'lies'. (CBC)

Montreal opposition leader Benoît Labonté is denying allegations he had dealings with the construction entrepreneur at the centre of the city's water-meter scandal.

The allegations were reported Friday by RueFrontenac.com, the online news site written by the locked-out journalists from the French-language daily Journal de Montreal.

Labonté met with Tony Accurso in March 2008 while preparing to launch his bid to lead the Vision Montreal party, the website said, citing anonymous sources.

The website alleges Labonté eventually asked for and received more than $100,000 in donations from Accurso.

Labonté said he met Accurso just once in 2006, while he was still a member of

'It is a smearing campaign,'— Benoît Labonté

Mayor Gérald Tremblay's party.

"He was introduced to me at a cocktail organized by Union Montreal and Frank Zampino in the St. Leonard borough – that was my only meeting with him."

Labonté resigned from Union Montreal in Sept. 2007 following a dispute with Tremblay.

He was elected leader of Vision Montreal in May 2008, a position he held until stepping aside to make way for Louise Harel in June.

Labonté said he scrupulously followed the fundraising rules set out by Vision Montreal for its leadership race.

"There was never any financial contribution of any nature [from Accurso]," Labonté told reporters at a news conference on Friday.

"I think it a smearing campaign," Labonté said of the accusations, which come as of Montreal's Nov. 1 election approaches. "I think a lot of people on the other side would like to keep their job," Labonté said.

Labonté said he has demanded a retraction from the website, and is threatening to sue for defamation.

According to the website, Accurso also denied meeting with Labonté, or contributing to his campaign.

RueFrontenac.com did not immediately return calls for comment.

Relationship criticized

Labonté has been critical of the relationship between Accurso, and former Montreal executive committee chairman Frank Zampino.

Montreal's auditor general launched an investigation into the awarding of the city's $355-million water-meter contract after it was revealed Zampino had vacationed aboard Accurso's yacht.

Accurso's construction company, Simard-Beaudry, is part of the consortium that won the contract — the biggest ever awarded by the city.

In April, the mayor suspended the contract after the Canada Revenue Agency revealed it was investigating three of Accurso's companies including Simard-Beaudry for tax evasion.

Tremblay cancelled the contract last month following a damning report from the auditor, which said that elected officials had not been provided with sufficient information before approving it.