William Shawcross confirmed last week he would be leading the probe into the appointment of Richard Sharp following reports the chairman had helped Boris Johnson secure a loan.

But just seven days later, Mr Shawcross has written to the chair of the digital, culture, media and sport committee, saying he would be handing the case over to an "independent person".

Labour's shadow culture secretary Lucy Powell - who called for the investigation - hit out at the timing of Mr Shawcross's decision, tweeting: "It's taken him a week to realise a conflict of interest, sharing these cosy relationships.

"The truth must come out about this appointment."

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Mr Sharp was appointed to the top BBC role in 2021 after being announced as the government's preferred candidate.

But the Sunday Times has claimed that in late 2020, Mr Sharp was involved in arranging a guarantor on a loan of up to £800,000 for the then-prime minister.

Mr Sharp has claimed there was "no conflict of interest" and he was given the job "on merit", while Mr Johnson has told Sky News the chairman "knows absolutely nothing about my personal finances - I can tell you that for 100% ding-dang sure".

But in another article by the Sunday Times published at the weekend, the newspaper claimed the former PM was warned by officials to stop discussing his financial arrangements with Mr Sharp on 22 December 2020 - just two weeks before the chairman's appointment was due to be announced.

Mr Shawcross confirmed last Monday that he would review the competition around Mr Sharp's appointment "to assure myself and the public that the process was run in compliance with the government's governance code for public appointments".

But now the top public servant has confirmed he will be stepping down from the inquiry and handing it over to someone else.

In his letter, the commissioner wrote: "As I have met Mr Sharp on previous occasions, I have decided to recuse myself from this particular investigation.

"I will be delegating my powers as commissioner... to an independent person who will be appointed by my office for this one investigation.

"They will have sole responsibility and will be supported by my officials."

Mr Shawcross added: "Although I will play no part in this particular investigation, I will continue with all my other regulatory functions as commissioner."

A former chair of the Charity Commission, Mr Shawcross has held roles as the UN High Commissioner for Refugees Informal Advisory Panel and as a member of the Council of the Disasters Emergency Committee, as well as being a former foreign correspondent.

He is also the father of head of the Number 10 policy unit, Eleanor Shawcross.