Lee Jasper's role in funding has been called into question

Mayor Ken Livingstone said he had taken the step after Lee Jasper himself asked for the newspaper allegations to be referred to the police to investigate.

An internal inquiry had already cleared Mr Jasper of any wrongdoing.

The allegations concern money paid by the London Development Agency (LDA) - the mayor's business arm - to a number of black organisations.

One of them was Brixton Base which is run by Errol Walters, a friend and close associate of Mr Jasper.

'Unsatisfactory report'

Brixton Base received �280,000 from the LDA to pay rent, even though the LDA is its landlord. It also received �230,000 to stage three short courses in arts.

An internal LDA inquiry found that Mr Jasper had acted legally.

The report said it did not have the power to look at claims private individuals took money from organisations to which the LDA had given funds.

The Evening Standard should immediately take any evidence it claims to have to the police or stop making these false allegations London mayor Ken Livingstone

It has referred these allegations to the police to investigate.

But the London Assembly described the report as "unsatisfactory" and has called for an independent inquiry.

On Friday, Mr Jasper asked for allegations made in the Evening Standard newspaper to be referred to the police.

"I am being prevented from clearing my name, black organisations across London are being weakened by a systematic campaign in the Evening Standard from seeking funds, and a deliberate attempt is being made to divert attention from the real issues confronting London at the Mayoral election," he said.

"This is being done deliberately and consciously - far from seeking clarity, the Evening Standard for 10 weeks has been running stories of false allegations against me without taking alleged evidence to the police."

'Absolute clarity'

Mr Livingstone stressed the police had not approached him and that he thought the investigation would clear his race adviser.

"The Evening Standard should immediately take any evidence it claims to have to the police or stop making these false allegations - in the good old phrase, 'put up or shut up'.

"In agreeing Lee's request I have also made the extremely difficult decision that, like any GLA officer subject to a police investigation, Lee Jasper will be suspended pending the outcome of the police investigation," Mr Livingstone said.

A spokesman for the Metropolitan Police said it will examine any material that is handed to it on any subject where there are claims of a criminal act in London.

A statement from the Evening Standard said: "We welcome any police activity that will give absolute clarity to the spending of public money.

"It is absolutely right that the investigations are as comprehensive as necessary. We have always said that we are very happy to co-operate with the police in providing them with information from our investigations."

A statement from the London Assembly said: "The London Assembly will continue with its scrutiny and will not be diverted by an attack designed to distract from the real issue, how the London Development Agency conducts its business and delivers value for money."