Investigation launched into grassroots grants

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Sport England said it had recently discovered funding to sports over the past eight years had been made without its knowledge via the "World Class Payments Bureau".

The role of the bureau did not show up in Sport England's annual accounts and the investigation will determine whether the cash was properly spent on coaches and facilities.

Sport England chief executive Jennie Price was alerted to the existence of the bureau when she received one of its bank statements at the end of last year and immediately shut the account down.

The bureau, set up in 1999, was intended to distribute funds and oversee spending for sports, such as karate, considered to have insufficient governance structures of their own.

Sport England currently distributes £120m a year to community projects in 46 sports.

An independent inquiry will be headed by Tim Dutton QC, and report its findings in the autumn.

Sport England chair Richard Lewis said: "It is concerning that a bank account operated outside the usual financial controls of Sport England. This fell short of the procedures and safeguards now in place in this organisation."