£190,000 City Hall cash lost as Brixton project is closed

Brixton Base, run by a close friend of the Mayor's senior aide, Lee Jasper, received £535,000 from Mr Livingstone's London Development Agency, even though it ran only three short training courses and occupied an LDA-owned building with the first year rent-free.

Its closure - amid intense financial scrutiny following articles in the Standard - discredits claims by Mr Livingstone just two weeks ago that there was "a full audit trail" for the project with "complete chapter and verse on how the money's been spent".

In fact, LDA auditors sent into the organisation in October found at least £193,000 missing, something the Mayor failed to disclose at the time.

Brixton Base was one of 11 organisations run by friends or associates of Mr Jasper, the Mayor's adviser on policing and equalities, that have received a total of at least £2.5 million from City Hall while appearing to do little, or in some cases nothing.

Brixton Base is the fourth to go out of business, taking GLA cash with it.

Mr Livingstone announced the closure in an LBC interview today, but insisted he had "total confidence" in Mr Jasper.

"You look at Lee Jasper. You look at the clothes he wears. This is not someone who has been getting vast backhanders," he said.

The Mayor claimed Mr Jasper and LDA chief executive, Manny Lewis were being "smeared" by the Standard story which originally exposed the suspect grants. He blamed the Standard for the closure of Brixton Base.

But the clamour for a full inquiry was growing deafening today.

Tory mayoral candidate Boris Johnson said: "This raises serious concerns over the Mayor's assurances of a full audit trail. The Mayor needs to tell Londoners exactly what was known and when, and how much money is unrecoverable."

Brian Paddick, the Lib Dem mayoral candidate, said: "It is essential that the closure should not prevent a full and independent investigation into the LDA's grant-giving processes."

Mr Jasper is patron of Brixton Base and a close friend of its director, Errol Walters. The project received at least £230,000 from the LDA to run the three training courses, but film-maker Shango B'Song, who led one course, said he paid for most of it himself. He and six of his students said Brixton Base officials, although not Mr Walters, threatened them and lied to funders in their presence.

Leaked emails show Mr Jasper was heavily involved in the decision to give Brixton Base some of its grants and protected it from LDA officials who had deep concerns about the projects and wanted to evict it.

Brixton Base said today it had left the building but not closed. It said it was co-operating fully with the auditors and was "confident they will find all monies received were claimed against proof of expenditure".

The LDA said it supported Brixton Base from 2005 to this May but sent in auditors after the body failed to provide a statement of expenditure. The agency said audit results were expected next month.