Prime Minister Theresa May vowed to change Britain's rules on non-disclosure agreements on Wednesday, after judges barred a newspaper from reporting #MeToo-style allegations of sexism and racism against a leading businessman.

"Sexual harassment in the workplace is against the law and such abhorrent behaviour should not be tolerated," May said when asked about the case in parliament.

Wednesday's Telegraph said five witnesses had come forward with allegations amounting to a "British #MeToo scandal which cannot be revealed."

It said the businessman had secured an injunction "to prevent this newspaper revealing alleged sexual harassment and racial abuse of staff."

The case also reflected concerns about "the use of injunctions to limit British press freedom," the newspaper added.

"Non-disclosure agreements cannot stop people from whistleblowing, but it is clear that some employers are using them unethically," May said.

She said the government planned to publish draft measures to "make it absolutely explicit to employees when a non-disclosure agreement does not apply or cannot be enforced."

Opposition Labour lawmaker Jess Phillips, who questioned May in parliament, said the current laws "allow rich and powerful men to pretty much do whatever they want, as long as they can pay to keep it quiet."

Phillips said the court injunction supported "non-disclosure agreements that have been used to silence women who have been sexually harassed and others who have been racially abused."

Supporters urged Philips on Twitter to use parliamentary privilege to name the businessman, but she claimed not to know his name.