Mayor's London audit uncovers shock

The Forensic Audit Panel, created by London Mayor Boris Johnson after he was elected last month, has unearthed a culture in which spending was encouraged and political interference common, but where there were few checks on whether taxpayers got value for money, its head Patience Wheatcroft said.

Seven police investigations have already been launched - although two have since been dropped - and more referrals to Scotland Yard have not been ruled out, Mrs Wheatcroft said.

They all related to the LDA except the seventh, revealed on Saturday, which involves the GLA and its role in Caribbean Showcase - an event partly organised by former mayor Ken Livingstone's controversial senior aide Lee Jasper.

Mr Jasper stepped down in March on the eve of a London Assembly meeting at which he was due to be publicly questioned about the alleged misuse of City Hall funds. He has denied any impropriety.

Asked about the organisations which the audit panel is investigating, Mrs Wheatcroft - a former journalist - said: "Quite a few of them are involved with Lee Jasper.

"His role was to push through the policies that the Mayor wanted to see come to fruition so he would have been involved in quite a lot of projects."

The Desh-bangla Foundation and the European Federation of Black Women Business Owners were eliminated from police inquiries on May 22 after insufficient evidence was found for the investigation to continue, Scotland Yard said.

City Hall said the four police investigations that are continuing are looking at funding given to Green Badge Taxi School, Ethnic Mutual, Diversity International Ltd and Brixton Base.

Nine people have been arrested during the City Hall corruption inquiry and all have been bailed. Mr Jasper was not among those arrested.