A quango chief appointed by Prime Minster David Cameron has resigned following the disclosure that he is bankrupt.
Businessman Tony Caplin has stepped down as chairman of the Public Works Loans Board (PWLB), which is responsible for £60 billion of loans in infrastructure projects.
The Mail on Sunday reported that Number 10 had been forced to act after an investigation it carried out revealed the former Conservative Party chief operating officer had been made bankrupt in 2012.
The newspaper reported that the prime minster had no idea Mr Caplin had been declared bankrupt - but Whitehall rules require anyone serving on a public body who is declared bankrupt to inform the relevant minister immediately.
A Government statement said: “Tony Caplin was appointed to a number of public bodies by the Labour Party. He was re-appointed to the PWLB by the Prime Minister.
“He should have declared he was bankrupt. This has been pointed out to him and as a result he has resigned.”
It added that Mr Caplin had “no role in the Conservative Party nor is he contributing to the manifesto”.
Mr Caplin - a former chairman of stockbrokers Panmure Gordon where Mr Cameron's father Ian was a partner - has also left his post on the Medical Research Council.
He has previously served on a number of other public bodies, including the North West London Hospitals NHS Trust where he was chairman until January of last year.
He has been a commissioner on the PWLB for 10 years and in July 2013, he was appointed chairman by Mr Cameron.
Senior Labour MP Margaret Hodge, who chairs the Commons Public Accounts Committee, told The Mail on Sunday: “This raises serious questions which should be investigated.”
And Conservative MP Douglas Carswell said: "This proves the need for MPs to be given the right to interview public appointments instead of letting ministers hand them out to whoever they choose."
Additional reporting by Press Association