The London mayor, Ken Livingstone, suspended his controversial race adviser and asked the police to investigate what has happened to thousands of pounds-worth of grants.
But despite triggering the criminal inquiry, Mr Livingstone insisted he had faith Lee Jasper would be fully exonerated over cash given in grants by the London Development Authority [LDA] to several ethnic minority projects.
The row will further muddy the already fractious campaign for London mayor, in which Mr Livingstone is seeking to be re-elected for a third four-year term, in the face of stiff competition from Conservative rival Boris Johnson.
He has already blamed a “witch-hunt” by people with a “racist” agenda for the furore, which centres on grants totalling around £3 million given by the LDA to projects, some of which allegedly cannot be properly accounted for.
Emails allegedly showing the race advisor pressuring the LDA into delivering the money to organisations he supported were last week read to the London Assembly, which is also investigating the matter.
Mr Jasper, who is now suspended from his City Hall post for the duration of the investigation, said he asked the mayor to refer the allegations against him to the police as a means to clear his name.
Critics suggested Mr Livingstone had acted to defuse the row, with a criminal inquiry now unlikely to be resolved before the May 1 poll.
Blaming a media “campaign” against him by the Mayor’s political rivals, Mr Jasper insisted, however: “Investigation by the police will clear my name and put a stop to this.”
The Mayor added: “As the interests of London are best served by putting an end to this malignant political charade I have concluded that a full police investigation is the most authoritative way to end this story once and for all.
“I want to make completely clear the police have made no approach to me to refer these allegations. “I believe this investigation will exonerate Lee Jasper and show this to be a shameful campaign.”
But Mr Johnson said: “This is an outrageous attempt to avoid scrutiny Mr Jasper has been suspended—presumably on full pay—until after the election, in the hope that the full facts will not come out.
“It is clear that the Mayor’s handling of City Hall is descending into sleaze, chaos, and now cover-up.
“How can the Mayor possibly focus on crime, housing and transport when he is mired in maladministration?
“It is time to clean up City Hall, and time London had a change from this tired, stale, incompetent and increasingly decadent regime.”
Liberal Democrat Mayoral candidate, Brian Paddick, added: “You can tell from Ken Livingstone’s demeanour that he is seriously worried by the bad smell that is emanating from his own administration and his own advisors.”
Lee Jasper, London mayor’s race advisor.