Yard lost £30m after warning to pull out of Icelandic bank

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The Metropolitan Police Authority decided to withdraw its money from Landsbanki in April last year on the advice of its treasurer, Ken Hunt.

But weeks later it reinvested £30million without Mr Hunt's knowledge - he only found out once the bank was nationalised in October last year.

John McFall, chairman of the Commons Treasury Committee, called it a "massive breakdown in corporate governance" as two official reports criticised the lack of oversight the authority displayed in investing taxpayers' money.

Mr McFall criticised Mayor Boris Johnson who, as chairman of the authority was ultimately responsible for the investments.

"Boris Johnson should make amends and hold a meeting with all of those responsible. It is a scandalous waste of public money, and we need to know that he is getting control of the authority's finances," he said.

The reports also indicate that no attempt was made to remove Landsbanki from an approved list of possible investments, leaving the authority's investment manager free to put money into the bank.

The Met invested £10million in July last year and followed that with a further £20million on 23 September, 15 days before Landsbanki was nationalised.

An internal report into the affair was given to the finance committee in November but only released publicly over the weekend.

Green Party finance committee member Jenny Jones criticised the delay. "This was an absolute disaster, a terrible waste of funds, and shows a real problem within the organisation," she said.

"A public body should not invest £30million without telling its treasurer exactly what is going on."

A second report, by auditors KPMG, was commissioned in February and found nine serious failings in the authority and the Met.

The Met said: "It's important to remember that both the Audit Commission and KPMG found the Metropolitan Police Service to be completely compliant with Treasury management policies."

Kit Malthouse, vice-chairman of the MPA, said: "I raised serious concerns about internal controls in place to ensure public funds are secure and safe. MPA members accepted the recommendations of the KPMG review."