Comment: This is the first stage in rescuing the LDA disaster

Those are, to recap: that "money was misspent on a massive scale" at the LDA; that it "served as the Mayor's chequebook" and "poured money into projects that were ill thought-out" on the basis of mayoral whims and political favouritism rather than need; and that "tens of millions of pounds" were wasted. As squibs go, that doesn't sound particularly damp to me.

Readers may remember that before the election, when first confronted by the Evening Standard with very similar allegations, Mr Livingstone denounced them as total lies. He now seems to have made a major shift in his position.

His new, revised defence appears to be that yes, the LDA did do all the things of which we accused it, all those months ago, and which Patience Wheatcroft's audit finds today - but that she "misunderstands the nature of the mayoral system in London".

"The electorate select a mayor ... it is up to that person to get on and take decisions for London. If you don't like those decisions, you can be pejorative and call them 'whims', or you can say that the mayor is setting out strategic priorities".

"Strategic priorities" is not the phrase most people would use to describe the millions of pounds in City Hall grants paid to more than a dozen projects run by friends of Mr Livingstone's adviser, Lee Jasper, money which then mysteriously disappeared with little or nothing to show for it.

As a result of the Evening Standard's investigations, five of those projects and nine of Mr Jasper's friends, including his City Hall deputy, Rosemary Emodi, are under police investigation.

Mr Livingstone may seize on today's finding that the misspending was not due to corruption at City Hall. But no one ever said that Mr Jasper stole public money. The charge against him is that he helped channel it to his cronies. The lack of accountability was only possible because of Mr Jasper's interference in the LDA's grant-giving processes on their behalf.

He was finally forced to resign, not because of "inappropriate emails" proposing to "honey glaze" a lady friend - but because he personally signed off a City Hall grant of £100,000 to a project run by that same woman.

Today will also make it even harder for Mr Livingstone to claim, as he still does, that there is "no evidence" for any allegation of wrongdoing. In addition to the mountain of company documentation, email and whistleblower evidence that supported our original investigation, there is now this definitive official report.

Away from the individual misuse, the report paints a disturbing broader picture of an LDA in chaos and diverted by political meddling from its core task of promoting jobs and growth. In the poorer areas of London, that task is very important. Economic activity rates in the boroughs of Tower Hamlets and Newham are the lowest in the UK. London's unemployment rate, astonishingly, is Britain's highest. And, as the economy stalls, the need for an effective LDA is increasing.

But instead of funding projects on the basis of effectiveness and need, the agency spent its money on social engineering, racial and gender quotadom (50 per cent of the projects it funded had to be run by ethnic minorities and 50 per cent by women) and the purchase of political support.

It ignored many genuine grassroots organisations - who would constantly complain to us that they could never get funding - preferring instead to deal with "astroturf " bodies stocked with Livingstone supporters. As a result, even the LDA itself admits that its performance in reducing barriers to employment for the least wealthy has been "poor".

Today's report is the first stage in rescuing the London Development Agency, and disadvantaged Londoners, from the disaster that it has become.