* Sexual harassment claims damage parliament's reputation
* Culture under fire as allegations mount
* Defence minister resigns after touching knee
By Elizabeth Piper
LONDON, Nov 2 (Reuters) - From William Pitt to Winston Churchill, Britain's finest prime ministers have risen to greatness in the Palace of Westminster, heightening its reputation as one of the world's most respected parliaments.
But with nine centuries of history come traditions, and a culture that is now under fire for concentrating power in the hands of lawmakers who can make or break the careers of aides, interns and party activists.
The resignation of Britain's defence minister, who admitted repeatedly touching a radio presenter's knee in 2002, and a series of accusations against other members of parliament, from alleged extramarital affairs to sexual assaults, have prompted calls for change.
Parliament is an "old and famous" institution, said Brendan Chilton, a Labour activist and general secretary of Labour Leave, a pro-Brexit group.
"However it has in recent years become a den of vice. We should all seek to make parliament the envy of the world again."
The ornate Palace of Westminster, beside the River Thames in the heart of London, is home to both the upper and lower houses of parliament and is seen by some historians as one of the birthplaces of modern democracy.
But allegations about British politicians, many of them unsubstantiated, have surfaced since sexual abuse claims against Hollywood producer Harvey Weinstein prompted women and men in British politics to share stories about improper behaviour.
Claims of sexual harassment have prompted some newspapers to refer to parliament as "Pestminster".
Michael Fallon resigned as defence minister on Wednesday over past behaviour he said had fallen "below the high standards we require of the armed forces".
Two more ministers are under investigation by the governing Conservative Party into allegations of inappropriate behaviour and the opposition Labour Party and Scottish National Party are looking into similar reports about party members.
The Palace of Westminster's debating chambers, its lavish tea rooms and its maze of corridors with portraits of long-gone politicians and prime ministers can inspire and confuse in equal measure.
Like a self-contained village, it has it own post office, hairdresser, gym, restaurants and bars. There is little reason to leave and for many workers, days are spent in its offices and evenings are spent in its bars.
"Drinking culture is both fun and a bit depressing," one parliamentary researcher wrote on the Glassdoor website where employees and former employees anonymously review companies and their management. "You will miss out on networking if this is not something you want to do."
It is a heady mix, and many relationships have grown in an environment where people work closely together, and often under pressure, for long hours.
But the allegations that have surfaced in recent weeks also depict it as an environment where inappropriate behaviour is widespread and a laddish culture, where what one person sees as a joke is offensive to another, prevails.
The accusations describe parliament as a place where careers of researchers, interns and aides can be decided by the member of parliament or minister they work for - and suggest some fear for their future if they refuse sexual advances.
Many female lawmakers have welcomed the opportunity to share their experiences, some of which they have kept silent about for years for fear of, if not reprisals, criticism from colleagues or officials for bringing parties into disrepute.
"There is obviously a problem, it's a good thing that it's been exposed," Labour lawmaker Harriet Harman told parliament this week. "No one should have to work in the toxic atmosphere of sleazy sexist or homophobic banter."
Scandals involving members of British politicians are not new. The Profumo Affair, involving sex, a Soviet spy and the secretary of state for war, helped bring down the Conservative government in 1963. Twenty years later, Conservative Cecil Parkinson resigned as trade and industry minister over an affair with his secretary, who became pregnant.
But Fallon told the BBC that what had been "acceptable 15, 10 years ago is clearly not acceptable now".
The government is introducing measures to tackle sexual harassment, including measures to enforce a code of conduct and to set up an independent grievance procedure. But critics say the power disparity between lawmaker and employee will remain. (Reporting by Elizabeth Piper; editing by Giles Elgood)
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