Boris Johnson was engulfed in a crisis last night when one of his most prominent appointees at City Hall was forced to deny allegations about inappropriate conduct and financial irregularities.

Mr Johnson, the London Mayor, announced an independent inquiry into Ray Lewis, his Deputy Mayor for Youth, after learning that Mr Lewis had been barred from holding office in the Church of England because of an alleged serious misdemeanour.

Mr Lewis said that the allegations, some from former parishioners, centred on “financial stuff and one or two other things about inappropriate behaviour”. He denied them all, saying that he had been unaware of them and that they were “without grounds”.

The allegations are highly damaging for Mr Johnson, who had heralded Mr Lewis as the key figure in his battle against teenage knife crime, praising his credentials as the leader of an academy for deprived inner-city youth.

Mr Johnson, who said he had been unaware of the allegations when he had appointed the former vicar, had entered office promising a clean slate after his predecessor Ken Livingstone’s regime was tainted by allegations of sleaze and corruption.

However, one of his senior advisers was forced to quit last month after remarking that Caribbean immigrants could leave London if they did not like Mr Johnson. The mayor insisted that James McGrath, his political strategist, was not a racist.

Last night, he refused to suspend Mr Lewis despite the allegations, saying that he was the one man who had given him “hope and aspiration” when he had become the Mayor of London. He drew support from an unlikely quarter when his mayoral predecessor, Ken Livingstone, said that he sympathised with him. “Up until now my thoughts were: ‘I wish I had found him [Mr Lewis] before Boris did’,” said the former Labour mayor.

Mr Livingstone said he had been in the same position as Mr Johnson, when someone he had appointed had faced allegations. “I would say: ‘give us evidence.’ Until there is evidence I will stand by my staff,” he added.

Mr Lewis dismissed the allegations as a smear campaign.

“I have never harassed anyone. I have never defrauded anyone. I am happy to face questioning and investigation on all these charges,” he said.

He said that while he was no saint and sometimes rubbed people up the wrong way: “I am not the person painted by these allegations.”

The allegations emerged when Mr Lewis was working as a clergyman in West Ham, East London, in the late 1990s.

The Bishop of Chelmsford, the Right Rev John Gladwin, confirmed that Mr Lewis had faced Church disciplinary measures between 1999 and 2005. They had allowed him to call himself a priest but not to minister or preach.

Bishop Gladwin said: “This was because a misdemeanour of such seriousness had been committed that in the opinion of the Archbishop, the person concerned should not exercise his ministry for the time being.”

Mr Lewis, who quit the ministry in 1997, said that he was unaware of any suspension. Asked at a press conference yesterday about allegations concerning sexually inappropriate behaviour, he said that they were “totally unfounded and complete rubbish”.

The allegations of financial irregularities concern a large sum of money that he borrowed from a parishioner.

Questions may also be asked about Mr Lewis’s short tenure in the prison service. He spent one year as a junior governor at Woodhill prison in Milton Keynes before moving to The Mount, near Hemel Hempstead, for less than a month. He left and founded the Eastside Young Leaders Academy in Edmonton, East London.

Mr Lewis said he would resign if the allegations were proven.

Times Recommends

• Should Knox’s trial even have reached the courtroom?
• All that glitters is not sold in Wright’s world
• Believe it or not, Big Brother is your friend