I bought some off ebay a few weeks ago and put it in my tank (without washing it

) which was filled only with water to test out my set-up. After a day of being in the tank it started growing this white fluff, and then each day after that the tank water got smellier and smellier until the smell was unbearable. I drained the tank down and cleaned every thing up, but even then the smell had penetrated plastic fittings and needed cleansing.
I was just glad it was only a test run, and I didn't have any gravel/plants/hardscape in there.
The redmoor is not being used. I bought some bogwood from Maidenhead Aquatics and I'm using that instead, but this time I soaked it in a barrel of hot water, which was changed every day, for week. After 4 days everything appears okay.
If I was you I'd get it out of the tank and then decide what to do/how to clean it.