We still need answers - where is the money?

But it leaves open much larger questions about the fate of the missing money, about the character and judgment of the Mayor, and about the very institution of the mayoralty itself.

It is worth recapping the Standard's initial findings and Mr Livingstone's initial response to them. After a six-week investigation, starting in October last year, we found 11 organisations run by close friends and associates of Mr Jasper; organisations paid at least £2.5million in City Hall grants, but which appeared to have done little or nothing in return.

Several of the organisations operated out of the same small room at a business centre in Kennington. The same few people, all friends of Mr Jasper's, popped up again and again in the directors' lists. Some of the organisations had received hundreds of thousands of pounds from City Hall - but their accounts showed no trace of the money.

We found a project called Diversity International, run by a man called Joel O'Loughlin who, we discovered, was a close friend of Mr Jasper's.

Mr O'Loughlin's company was given £346,000 to run a London business website, even though it was based in Liverpool.

We learned that Mr O'Loughlin put Diversity International into liquidation without accounting for the taxpayers' money. The liquidator, we found, was preparing legal action against him for "trading offences".

We found a project called Brixton Base, whose patron was Mr Jasper and whose director was a close friend of his, Errol Walters. Brixton Base got £287,000 from Mr Livingstone's London Development Agency for "premises", even though it occupied an LDA-owned building and was charged no rent at the time.

It got a further £230,000 to run training courses over a two-year period, but only ever delivered three courses, lasting a matter of weeks.

The leader of one of those courses, Shango B'Song, told us that he paid for it out of his own pocket and never saw more than a fraction of the City Hall grant supposedly given to fund it.

When he complained to a member of Brixton Base management, he said, "they told me they knew some gang members who would 'break me up'." Undaunted, Mr B'Song visited the LDA to protest in person. As he left the LDA headquarters after the meeting, his mobile rang. "It was Errol," he told us. "He said it was no use me complaining to the LDA because he had his people on the inside." Just who those "people" were became clear when we were leaked emails showing that Mr Jasper had been instrumental in securing funding for Brixton Base - against the LDA's wishes - and defending it against LDA officials who knew it was no good and wanted to evict it from their building.

Those were two of the 11 projects about which we submitted a list of detailed questions to the LDA and the Mayor six days before publication. City Hall's only response was to say that even asking the questions was a "racist attack" on black Londoners. When the Standard published its findings, on 5 December, Mr Livingstone denounced them as a "tissue of lies" and announced that he would not even investigate them. He told BBC London: "There is not the slightest question... of my dealing with [the Standard's enquiries.] I'm not interested in anything Andrew Gilligan throws up. The man has been a consistent liar."

Asked how he knew the stories were "lies" if he refused to investigate them, the Mayor replied: "For all the projects, there's a full audit trail, with chapter and verse on how the money's been spent." Although Mr Livingstone continued to denounce the stories as "shameful" and "obnoxious"-attempts to "spread hatred, discrimination and contempt" by "the most discredited reporter in the country", his difficulties were starting to mount. Other material poured in from London's black communities. We published further emails and documents showing Mr Jasper's key role and unveiled one of our key sources, the former LDA official in charge of one of the suspect projects - sacked at Mr Jasper's behest after she spoke out against his interference. Mr Livingstone was obliged to concede an internal LDA review, which found that there was not, in fact, an "audit trail" of any description, let alone "chapter and verse," on four of the six suspect projects it investigated.

LDA officials referred all four to the police. The LDA delayed releasing the deeply damaging full text of the review, instead issuing a press release claiming Mr Jasper had been "cleared" - a tactic condemned as dishonest by the London Assembly and a cross-party group of MPs.

During January, the ground crumbled further under the Mayor's feet. Mr Jasper's deputy, Rosemary Emodi, had to resign after taking a free holiday with the director of Brixton Base - and lying when journalists found out about it. Mr Jasper had to admit that money was illicitly transferred from an LDA-funded project to bail out a loss-making private company of which he was a director - although he claimed that the transfer had been made without his knowledge.

Yet further emails showed Mr Jasper playing an even closer role in the suspect projects than previously thought. Manny Lewis, the LDA chief executive, told the Assembly that Mr Jasper's influence over LDA staff had been "inappropriate" and said the LDA had not told the Mayor to claim there was a "full audit trail". The number of suspect projects, meanwhile, grew to 14; the amount of money involved to £3.8 million; and the number of police inquiries to six. Mr Livingstone lost his temper with the Assembly, raging that they were all "sanctimonious hypocrites".

Although protesting that he would "trust Lee with my life," Mr Livingstone's political life looked in growing danger. As the national media got interested and the polls turned nasty, he suspended Mr Jasper and referred him to the police - even though the allegations against Mr Jasper himself are of impropriety, not criminality.

Recognising a political tactic when they saw one, the Met swiftly excused themselves, though they continued their probe of the suspect projects. And the pressure kept rising.

This morning, Mr Jasper was due to have answered the Assembly's questions. But then, in yesterday's Standard, came the emails expressing his wish to "cook" his "sexy Kazzi ... before a torrid and passionate embrace". Kazzi is Karen Chouhan, a woman whose projects received at least £100,000 from City Hall on Mr Jasper's recommendation. Humiliated, still crying "racist" to the last, Mr Jasper finally fell on his sword.

The Mayor has been damaged by the "Jasper affair," and arguably much more than he need have been. A more cautious politician would have got rid of Lee Jasper long ago, and taken most of the steam out of the story. Instead, Mr Livingstone staked his reputation on Mr Jasper's probity, and defended him in the most aggressive way. Mr Jasper's departure does not answer the questions about the fate of all that public money that has slipped through his friends' hands. Indeed, perhaps it makes it harder to answer them. In the weeks ahead, the Standard will continue to seek answers.