£210k-a-year City Hall Official in Lee Jasper row is ousted

Manny Lewis, chief executive of the London Development Agency, is leaving after being told by Boris Johnson that his services will no longer be required.

Mr Lewis, whose £210,000 salary made him one of the biggest-earning public servants in the country, is entitled to six months' severance pay.

His departure underlines the rapid pace of change at City Hall since Mr Johnson was elected Mayor.

Today Mr Johnson announced he was nominating Westminster council chief executive Peter Rogers to replace Mr Lewis.

Businessman Harvey McGrath is nominee to chair the LDA. He is the chairman of business pressure group London First, and former chairman of hedge fund specialists the Man Group.

Both were nominated on an interim basis. The appointment of Mr Rogers will become permanent once he has been approved by the LDA board.

Mr McGrath, who is expected to stay in his post for only a few months, must face a London Assembly confirmation hearing. Former Tory mayoral candidate Steve Norris is still being touted as a permanent chairman of the LDA.

Current LDA chairwoman Mary Reilly will step aside next month.

Mr Lewis revealed his departure in an email to staff.

As chief executive of the agency, he was responsible for £3.2 billion in public funds and played a key role in linking up with the Olympic Delivery Authority. Any pay-off to Mr Lewis would have to be approved by the LDA board.

The Standard revealed in December how at least £2.5 million in City Hall money was given to organisations with links to Lee Jasper, Ken Livingstone's former policing and equalities director.

It is alleged the groups did little in return for the money. Police are investigating seven projects.

In February Mr Lewis, who was sent personal emails by Mr Jasper about the affair, admitted Mr Jasper's behaviour in dealing with the LDA was "not appropriate".

But he upset many Tories when he complained the allegations were "politically driven" and "undoubtedly" timed to coincide with the mayoral election race. He claimed the focus on the allegations was "disproportionate". An internal LDA inquiry rejected claims that it awarded grants inappropriately, but critics have called for a separate independent investigation.

Leaked emails showed Mr Lewis expressed "the deepest possible concern" about a £345,000 grant to Diversity International, run by Joel O'Loughlin, a close friend of Mr Jasper.

Mr Lewis wanted to sack Mr O'Loughlin and claw back the money but after Mr O'Loughlin spoke to Mr Jasper, the LDA withdrew the threat and agreed to give him a further £250,000. Two senior LDA officials who protested were sacked.

After the Standard published its allegations, Mr Lewis outlined a tougher project review system. If Mr Livingstone had won the election, it was widely expected he would have stayed on.

Today Mr Johnson said: "I was elected on a very clear mandate of providing value for money for taxpayers. It starts here with the London Development Agency.

"Harvey McGrath has unrivalled knowledge of the importance of business and skills in London and will be a supremely qualified individual to get the most out of this vital organisation.

"Peter Rogers has a proven track record of delivering in Westminster and his experience in reducing costs and implementing transparency is exactly what the LDA needs to start delivering for taxpayers with immediate effect."

Mr McGrath is vice-chairman of the Mayor's Skills and Employment Board and a director of Gateway to London, the inward investment agency for the Thames Gateway.

Mr Rogers has been chief executive of Westminster council for the last six years.