Police called in over City Hall scandal

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A leading London MP has written to Met Commissioner Sir Ian Blair, urging him to order an inquiry into how a scheme run by two associates of Lee Jasper - one of Ken Livingstone's most senior advisers - spent more than £172,000 in grants.

Vauxhall MP Kate Hoey said Mr Jasper and the Mayor's London Development Agency had "serious questions" to answer over the South London Green Badge Taxi School.

The project, a school for ethnic minority cab drivers, was championed by Mr Jasper and funded by the LDA and Transport for London. But it has had its probity questioned by a barrister who investigated it.

The Standard can reveal the two men who ran it, Mr Jasper's associates Greg Nowell and Clive Grey, are subject to a High Court restraining order after a neighbouring ballet school accused them of harassment and intimidation.

One of the men's friends was accused of assaulting the ballet school's female owner, while a former instructor at the taxi project claimed he was told that "there would be bullets flying in my direction" when he walked out of the job.

The Standard uncovered allegations about grants given to the taxi scheme being siphoned off to other bodies run by the men, while former instructors said they were never paid and the taxi school only ever had a handful of students.

Today's revelations, and the call for a police inquiry, are the latest development in the mounting political scandal surrounding Mr Livingstone.

The Standard has uncovered a string of allegations that LDA cash was given to associates and friends of Mr Jasper, described by the Mayor as "one of the most valuable people" at City Hall, with little or nothing to show for the £2.5 million spent.

Mr Livingstone, Mr Jasper and Mr Grey have vehemently denied any wrongdoing.