This is all part of the erosion of the integrity and independence of a number of British institutions

Tim Yeo Shadow culture secretary

Mr Davies, who has been BBC vice-chairman for eight months, has long supported the Labour Party and is a friend of Chancellor Gordon Brown.

On taking the job, however, he announced his resignation from the Labour Party on Wednesday and, stressing that one of his main aims was preserving BBC impartiality, said he would welcome a Conservative supporter as the new vice-chairman.

Mr Davies was an economic adviser to the last Tory Chancellor, Ken Clarke, and dismisses any claim he is a government crony.

"Especially in this job, but also in the job I have just come from in the City, it would be absurd if somebody had crony leanings to want to do these jobs," he said.

"You would be exposed instantaneously and you would be a disaster at them."

Personal call

It is understood Prime Minister Tony Blair telephoned new Conservative leader Iain Duncan Smith personally to give him what will be disappointing news for the Tories.

Mr Davies, is the first BBC chairman to be selected under the Nolan rules on public appointments and it is thought he was the only candidate to be recommended to ministers by an independent panel.

Davies's friendship with Gordon Brown has come under fire

Downing Street defended the appointment, saying ministers' only involvement was accepting the panel's recommendation - adding that it would have been strange if that advice had been overruled.

That has not, however, prevented a political row over the appointment of Mr Davies, whose wife, Sue Nye, works in Gordon Brown's private office.

The Tories raised concerns when Greg Dyke was made BBC director-general, criticising the move because he had donated money to Labour Party funds and say they are now more worried.

Shadow culture secretary Tim Yeo suggested the appointment put the BBC's political impartiality into question, although he thought Mr Davies "very well qualified for the job".

'Bad precedent'

He told BBC News: "Never before in the whole history of the BBC have the two top posts of chairman and director general been occupied simultaneously by prominent supporters of the same political party. I believe that is wrong in principle."

Yeo criticised the appointment

Mr Yeo said Mr Davies was right to resign from the Labour Party but that decision did not alter the break with past precedents.

"This is all part of the erosion of the integrity and independence of a number of British institutions," he said, blaming Tony Blair's attitude to "important British assets".

He added in a statement: "The only way for the BBC to salvage their reputation for political impartiality would be for them to appoint an identifiable Conservative vice-chairman."

Such an appointment cannot be made immediately because that too will have to be conducted under the Nolan rules.

Impartiality strengthened

Culture Secretary Tessa Jowell explained: "Advertisements will be placed at the end of the month and I hope an announcement will be made within three months."

Ms Jowell welcomed the use of the new process to choose the new chairman.

"The old way, with politicians making decisions in secret, is gone for good," she said, arguing that the change reinforced the BBC's impartiality.

Liberal Democrat parliamentary chairman Mark Oaten promised to monitor "very closely" the new stewardship of the BBC.

"Gavyn Davies has made a significant contribution to broadcasting in recent years, but his known political sympathies do give rise to concern," he said.