Police have said there is "no credible evidence of criminality" to substantiate allegations made against the elected mayor of Tower Hamlets in east London, after it was alleged that he had doubled funding for some ethnic minority charities in return for electoral support.
In a BBC Panorama documentary broadcast last month, Lutfur Rahman, who was elected as the independent mayor of Tower Hamlets in 2010, was accused by opposition councillors of awarding £3.6m to Bengali and Somali groups, despite recommendations by council officers that they should receive £1.5m.
Rahman, who denies the accusation, has executive power over the allocation of some grants made by the local authority.
A statement issued by the Metropolitan Police yesterday said that it had been reviewing three files about Tower Hamlets Council passed to it by the Department for Communities and Local Government, which has also commissioned the professional services firm PwC to conduct its own investigation into the matter.
"There is no credible evidence of criminality within the files to provide reasonable grounds to suspect that fraud or any other offence has been committed at this stage," the police statement said. "Therefore, the Metropolitan Police Service will not be investigating at this point in time and believe that it is appropriate for the material to be reviewed further by PwC and DCLG. We will continue to liaise with them should their audit uncover any evidence of criminality."
A Tower Hamlets spokesman said in a statement: "The news from the Metropolitan Police is to be welcomed and Tower Hamlets will continue to work with the auditors and DCLG."
A BBC spokeswoman said police were not investigating allegations made within the Panorama programme.
"We continue to stand by the programme's findings, which uncovered serious concerns about the use of public money that are still being investigated by the government," she said. "Our programme did not say there was evidence of criminality. The allegations relate to potentially unlawful expenditure, not to a criminal matter."