Ken Livingstone suspended one of his most senior advisers yesterday and referred allegations against him to the police as he struggled to put an end to an affair that threatens his re-election campaign.

The Mayor of London said that the move was intended to enable Lee Jasper, his race and policing adviser, to clear his name.

Mr Livingstone has been increasingly embattled over claims of financial irregularities in publicly funded organisations run by friends and associates of Mr Jasper. Police are investigating six organisations funded by the London Development Agency (LDA), which hands out hundreds of millions of pounds of taxpayers’ money each year.

With the London mayoralty elections just over two months away Mr Livingstone has chosen to cut adrift one of his closest advisers to limit any damage.

In a statement Mr Livingstone said that he had agreed to a request by Mr Jasper to suspend him and refer allegations to the police to help to put a stop to what he called a disgraceful political charade. He said: “I believe this investigation will exonerate Lee Jasper and show this to be a shameful campaign.”

Mr Jasper claimed that the London Assembly had refused deliberately to hold any hearings on the matter until March to “string out” the allegations. He said: “The deliberate aim of this delay is not to achieve clarity but to string out a series of unfounded and poisonous allegations in the media, and investigation by the police will clear my name and put a stop to this.”

Scotland Yard said that it would examine any material that was handed to it where there were claims of a criminal act in London.

Mr Jasper was linked to alleged funding irregularities at a series of London community projects in December. He denies any wrongdoing.

One newspaper claimed that hundreds of thousands of pounds that had gone to the groups had not been accounted for.

An internal review by the LDA cleared Mr Jasper last month. The London Assembly has since called for an independent inquiry. The LDA is still investigating the funding of 13 projects.

The issue has also raised questions about the relationship between Mr Livingstone and his advisers.

Boris Johnson, the Conservative candidate for mayor, said: “Only 12 hours ago the mayor informed us that he had full confidence in Mr Jasper. What has changed his mind?

“Millions of pounds of taxpayers’ money has been wasted. And we now have the police called in to investigate the mayor’s chief police adviser. It is time to clean up City Hall. How can the mayor possibly focus on crime, housing and transport when he is mired in maladministration?”

Mike Tuffrey, the leader of the London Assembly Liberal Democrats, said: “The mayor has been adamant that Lee Jasper is innocent of all accusations brought against him in the media. If this is the case why refer these allegations to the police? If the mayor is certain that Lee Jasper has not acted illegally surely he is wasting police time with this matter.

“The London Assembly has been demanding evidence on these allegations for a long time. Yet it was only last week that the London Assembly received over 900 pages of documents requested. These must be examined before we can conduct a proper scrutiny with Lee Jasper and other mayoral adviser colleagues.”

He added: “We received no warning and had to find out about Lee Jasper’s suspension through a press release. Again this proves that the mayor is unwilling to open his office up for scrutiny unless it is by his rules.”

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