The former MP Harvey Proctor has begun legal action claiming £1 million damages against the Metropolitan Police.
It relates to the alleged mishandling of the investigation into historical child sex abuse allegations against him that was later dropped.
He is also seeking compensation from a man known only as 'Nick' - who made the accusations about the politician.
The former Conservative MP last year told ITV News he had been left "mentally and physically destroyed" and "haunted" by the allegation he was part of a VIP paedophile ring in Westminster.
Mr Proctor said the Met Police "smashed into his life" in a "dragged out" investigation into the now-discredited claims he was involved in the abuse, torture and murder of young boys.
The 70-year-old wept as he described the impact of a probe he said cost him his job, home and public reputation he rebuilt after his political career ended in disgrace in 1987 following a tabloid sting.
The Met's defunct 18-month Operation Midland, which also wrongly implicated former home secretary Lord Brittan and retired field marshall Lord Bramall, ended in 2016 without any arrests or charges brought.
The Met paid compensation to Lord Brammall and the family of the late Lord Brittan over the false allegations.
All three men received apologies from former Met commissioner Sir Bernard Hogan-Howe after police dropped their investigation.