Chaos at the Yard as Yates resigns and more officers face allegations

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John Yates, formerly Britain's most senior counter-terrorism officer, was last night being investigated by the Independent Police Complaints Commission (IPCC) over allegations he gave a job to the daughter of Neil Wallis, the former tabloid executive arrested last week over phone hacking.

As Scotland Yard was plunged into crisis with two high-profile resignations in 24 hours, the IPCC launched an inquiry into "serious allegations" about the conduct of four high-ranking Metropolitan Police officers, including Sir Paul Stephenson – who resigned as Met Commissioner on Sunday – and Mr Yates, who resigned as Assistant Commissioner yesterday.

Two other former senior Scotland Yard officers, understood to be former Deputy Assistant Commissioner Peter Clarke and former Assistant Commissioner Andy Hayman, are also the subject of the investigation, which was triggered by a wide-ranging complaint from the Metropolitan Police Authority, which governs London's police force.

The IPPC said it had been called in to investigate Sir Paul's handling of the phone-hacking investigation and Mr Yates's review of the investigation in 2009 and "his alleged involvement in inappropriately securing employment for the daughter of a friend".

Its inquiry came last night at the end of another turbulent day for the country's biggest police force, which has been severely criticised for its failure to investigate the News of the World's apparently extensive hacking of the phones of public figures. In a development likely to raise more questions for police, it was revealed last night that Alex Marunchak, formerly head of the News of the World in Ireland, was carrying out potentially sensitive work for Scotland Yard while he was still a reporter at the News of the World.

Between 1980 and 2000, Mr Marunchak was on a list of interpreters used by the Metropolitan Police to provide translation and interpretation services for victims.

A statement from the Met said it had found Mr Marunchak had carried out a total of 27 hours of work on a freelance basis since 1996, when the records system became electronic, and it was likely he undertook work prior to 1996.

On Sunday night, Sir Paul resigned hours before a Commons statement on Scotland Yard, saying he could no longer remain in office because of questions about his links to Mr Wallis. He also fired a parting shot at David Cameron for employing Andy Coulson, Mr Wallis's former editor at the NOTW.

Yesterday Mr Yates resigned shortly after being told that he was about to be suspended. He insisted in a statement that he had done nothing wrong. "I have acted with complete integrity and my conscience is clear," he said.

"As I have said very recently, it is a matter of great personal regret that those potentially affected by phone hacking were not dealt with appropriately. Sadly, there continues to be a huge amount of inaccurate, ill-informed and on occasion downright malicious gossip published about me personally. This has the potential to be a significant distraction in my current role as the national lead for counter terrorism."

Mr Yates's resignation came after a leading member of the Metropolitan Police Authority, Dee Doocey, had described his review of the phone-hacking case two years ago as "a monumental error of judgement".

After only eight hours' work two years ago, Mr Yates had deemed satisfactory the investigation carried out in 2006 into phone hacking by his predecessor, Andy Hayman.

Mr Yates admitted earlier this month that he had not inspected 11,000 pages of the notes seized from the NOTW's private investigator Glenn Mulcaire which showed, according to the current police investigation Operation Weeting, that he had almost 4,000 likely victims.

Baroness Doocey, a long-standing critic of the Met's handling of phone hacking, said: "Hundreds of victims of phone hacking were failed and his resignation is long overdue. He made a monumental error of judgement which rendered his position untenable."

Jenny Jones, another member of the MPA, criticised Sir Paul's behaviour, saying there were times when he "treated the Police Authority with contempt."