Ken Livingstone's former race and policy adviser Lee Jasper was warned today that he was not in the clear despite escaping personal criticism in the London Development Agency audit report.

Panel chairwoman Patience Wheatcroft said there was no "clean bill of health" for Mr Jasper, who quit when it was revealed he sent sexuallycharged emails discussing "honey glazing" a woman, who was also receiving LDA backing.

Ms Wheatcroft said his conduct was an issue for the police, while the report said it had not carried out "an extended review of the influence exerted by Mayoral advisers".

The audit panel report said that investigators had found "ineptitude rather than corruption" in advisers dealing with the LDA. Ms Wheatcroft said: "We are not giving Mr Jasper's actions a clean bill of health. That's something that the Met is looking at."

Mr Jasper claimed he had been exonerated and added that he was "gob smacked" because he expected the Tory-dominated panel to be critical of him. Mr Jasper, who along with Mr Livingstone, visited City Hall for the report's publication, said: "I saw no way the panel could have been impartial with the leader of two Tory councils, a Tory member and the Mayor's business leader.

"To have been exonerated by a Tory panel is to be exonerated indeed. There was no smoking gun and no evidence of cronyism or corruption were found. When the police complete their inquiry, I have no doubt I will be cleared there as well."

The Mayor's panel said they had found Mr Jasper had not broken any internal LDA or GLA rules because there were none to be broken.

However, it recommended that new protocols were put in place so that projects seeking funding by the LDA were given more consideration.

Detectives are still investigating the funding of five organisations and Mr Jasper's involvement.

But Mr Jasper did admit today there had been occasions when he had had to lean on the LDA board for funding to be granted. He added: "Because of the very nature of the work there were unpopular projects when it came to gun crime and knife crime and sometimes they needed a little help along the way."

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