A Hungarian mayor has admitted to taking part in a drug-fuelled orgy on-board a luxury yacht after footage of the incident was shared online.

Zsolt Borkai — a married father-of-two and former Olympic gold medallist — is the conservative mayor of the Hungarian city of Gyor and a supporter of Prime Minister Viktor Orban.

But last week, he was engulfed in a sex scandal just days before the country's municipal elections were held on Sunday.

The story broke after a video of the 54-year-old having sex with an alleged prostitute during an orgy on a yacht was leaked on a blog and also on porn websites including Pornhub.

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Hungarian mayor Zsolt Borkai initially denied being involved in the orgy despite leaked footage showing him having sex with a young woman. Photo / Supplied
Hungarian mayor Zsolt Borkai initially denied being involved in the orgy despite leaked footage showing him having sex with a young woman. Photo / Supplied

The blog also accused the mayor of corruption, abusing drugs and hiring sex workers.

The video was taken during a trip on a yacht that was sailing in the Adriatic off the coast of Dubrovnik, Croatia.

A male friend of Borkai and a number of scantily-clad young women can also be seen in the clip.

The group was rumoured to have been drinking alcohol and doing drugs during the party.

Borkai, who has been the mayor since 2006, initially denied being involved in the orgy.

"I consider the lies published about me to be part of an opposition campaign aimed to divert attention away from their own incompetence," he said, according to the UK tabloid the Mirror.

However, he later backtracked and admitted his involvement — but is refusing to resign as a result of the scandal.

Borkai has also shared a photo of himself and his family on Facebook with the caption: "We're holding on. For good in bad" [or for better or for worse].

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Now the conservative politician is refusing to stand down from his position as Mayor of Gyor in Hungary. Photo / Supplied
Now the conservative politician is refusing to stand down from his position as Mayor of Gyor in Hungary. Photo / Supplied

A separate sex tape has also been leaked online which allegedly involved mayor Tamas Wittinghoff, the leader of the Hungarian town of Budaors.

During a recent press conference, Prime Minister Viktor Orban's chief of staff, Gergely Gulyas, slammed the release of both sex tapes as "the low point of Hungarian political life".

"We're in the middle of a singularly dirty campaign," Gulyas said, according to ABC News.

Budapest mayor Istvan Tarlos has also weighed into the scandal, calling Borkai "unworthy" of his post.

Hungarian mayor Zsolt Borkai made a cryptic reference to the scandal on social media. Photo / Facebook
Hungarian mayor Zsolt Borkai made a cryptic reference to the scandal on social media. Photo / Facebook

"It is undefendable, unacceptable and unworthy," he said, according to Hungary Today.

Borkai won an Olympic gold medal in gymnastics at the 1988 Seoul games, and is also the former president of the Hungarian Olympic Committee.