The commissioner of the Metropolican police was personally involved in the bidding process that led to a lucrative contract being granted to a company owned by a businessman who is a close friend and skiing companion.

Sir Ian Blair is facing calls for an official inquiry after Scotland Yard admitted yesterday that he had received a contract bid from a firm owned by Andy Miller, whom Blair has known for 30 years.

Miller confirmed that the two men had been on regular skiing trips together and had discussed the contract while on holiday.

Blair, whose position has been under pressure after a series of high-profile gaffes, denied acting improperly. He said he had declared his friendship with the businessman before the contract was awarded.

However, the disclosure provoked astonishment from senior officers and politicians who have previously been loyal to him.

Lord Harris of Haringey, chairman of the corporate governance committee of the Metropolitan Police Authority (MPA), the Met’s watchdog, said that he would call for a full inquiry. Harris was chairman of the MPA when the contract was granted.

“This is potentially extremely serious. It is certainly rather foolish. Normal practice would be for anyone in the commissioner’s position of having declared an interest to have stepped aside from the process,” Harris said.

“I’m sure the MPA will want to review all of the internal paperwork held in the Metropolitan police on this matter to satisfy itself of the probity or otherwise of these arrangements.”

David Davis, the Tory MP and former shadow home secretary, said: “If the commissioner influenced this decision at all, this would amount to a breach of trust.”

Davis is writing to Boris Johnson, the mayor of London, and is to demand an independent investigation by the Audit Commission.

The controversy concerns the Met’s decision in 2002 to grant a contract to Impact Plus, a consultancy firm based in Twickenham, southwest London, which was jointly founded and owned by Miller. As deputy commissioner at the time, Blair was responsible for overseeing the Met’s biggest contract to update its 999 call handling system.

MPA records show that in 2002 Blair “identified” that he needed outside advice to help him to ensure that the £275m project was properly managed. He told colleagues that he needed someone to act as a “programme conscience” overseeing the 999 contract so he could ensure that it was properly run.

In a statement the Met said four companies had been asked to tender for the contract and two ended up bidding.

Initially the Met said: “Impact Plus was awarded the contract. A panel including the commissioner, the Metropolitan police director of information and a senior staff officer assessed the bids.”

Later the Met issued a “clarifying” statement saying that the firm had made a presentation “to the evaluation panel and Sir Ian Blair”.

But it added: “At no time did Sir Ian participate in the evaluation.”

In a statement to The Sunday Times, Blair said that he had been “open and straightforward” and had declared the relationship in 2002 in a private note to the MPA treasurer.

He added: “I strongly reject any suggestion that I have behaved inappropriately in any way and consider I have acted with absolute probity in these matters.”

He said the granting of the contract “followed appropriate procurement processes. As part of programme governance, a subsequent review in 2005 confirmed this”.

In his 2002 disclosure Blair said: “Impact Plus is owned and run by a friend of mine.” But Met insiders said his admission that he was directly involved in the contract bidding process and received a pitch from his friend’s company looked “appalling”.

Senior Met officials said the relationship between Blair and Miller had been identified as a “problem”. One senior official said: “This was considered to be a problem and Ian probably was unwise.”

Another said: “It looks appalling. At the very best, it’s a gross error of judgment in someone so senior and is open to misinterpretation.”

Miller said yesterday that he had been Blair’s friend for nearly 30 years. He said he had discussed the contract on skiing holidays with the Met boss and admitted that he had benefited financially from the deal.

“If the angle you’re trying to get is ‘naughty Ian Blair gave contracts to a company which employed me’, that’s fairly creative stuff because it’s won on a competitive tender basis and Ian Blair deliberately removed himself from a vast majority of the activity,” he said.

The Met said it was unable to provide a “specific figure” for the work that Impact Plus did on the project. But it added that Miller’s firm had worked on other contracts for the Met.

“Impact Plus has received in the region of £3m between 2001 and 2008 for service to the Metropolitan police,” it said.

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