The Labour MP used a private members debate to call for the release of the 2002 report, which Watson said contains allegations that Alex Marunchak was heard discussing payment to Cambridgeshire police for information about the investigation into the murder of Soham schoolgirls Holly Wells and Jessica Chapman.
He said he was unsure as to whether the allegations he believes are contained in the report were true, but called for the document to be released.
Watson also spoke of alleged links between Marunchak and a suspect in the unsolved murder of private investigator Daniel Morgan, who was reportedly about to reveal police corruption when he was killed 25 years ago.
His death was the subject of five failed police inquiries and last year allegations arose relating the case to the suspect conduct of News of the World journalists.
Jonathan Rees, a business partner of Morgan's at Southern Investigations, was a suspect in the case until his acquittal following the collapse of the prosecutions.
Watson spoke at today's debate of "a close association between Rees and Marunchak ... a relationship that was so close they both had companies registered at the same address".
He said: "We now know that Southern Investigations had become a web of illegal activity and corrupt contacts."
Watson also told MPs that "thanks to a Guardian investigation we also know that Southern Investigations paid the debts of Marunchak" and that a BBC Radio 4 investigation has seen evidence that Morgan was about to take the story on police corruption to Marunchak, for which he was allegedly due to be paid £40,000.
Watson again called for a judge-led judicial inquiry into the murder of Morgan.
Watson said: "What the family [of Daniel Morgan] didn't know during any of the five investigations was that there was a relationship between News International, the police and private investigators."
In her written evidence to the Leveson inquiry, which is currently looking at the relationship between the police and the press, former detective constable and Crimewatch presenter Jacqui Hames said she was put under surveillance by the News of the World.
In evidence to the inquiry she said she believed "the real reason" she was put under surveillance was that suspects in the Morgan murder inquiry "were using their association with a powerful and well-resourced newspaper to try to intimidate us and so attempt to subvert the investigation."
Watson added that he believes News International owner Rupert Murdoch owes the Morgan family an apology.
A full transcript of Watson's speech is available here.
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