Co-Op: Cameron Pledges Flowers Inquiry

David Cameron has said there will be an inquiry into the appointment of the disgraced Methodist minister Paul Flowers as chairman of the Co-operative Bank.

The Prime Minister told the House of Commons there were "a lot of questions that have to be answered" about Mr Flowers' time at the head of the bank for three years.

Mr Flowers is under investigation by police after being filmed allegedly buying and using illegal drugs including crystal meth, crack cocaine and ketamine - a horse tranquilliser used as a party drug.

Police raided the home of Mr Flowers in Bradford on Tuesday amid the deepening scandal over his appointment to the bank and his association with the Labour party.

It came as it was disclosed that Mr Flowers had resigned as a Bradford councillor in 2011 after inappropriate adult material was found on his computer.

The Mail On Sunday filmed Mr Flowers allegedly buying drugs

On Tuesday the Co-op boss Len Wardle resigned with immediate effect because he had led the board that appointed Mr Flowers.

Speaking at Prime Minister's Questions on Wednesday, Mr Cameron said: "The Chancellor will be discussing with the regulators what is the appropriate form of inquiry to get to the bottom of what went wrong here.

"But there are clearly a lot of questions that have to be answered. Why was Rev Flowers judged suitable to be chairman of a bank? Why weren't alarm bells ringing earlier, particularly by those who knew?

"I think it will be important in the coming days that if anyone does have information they stand up and provide it to the authorities."

He added: "The first priority is to safeguard this bank and to make sure that it is safeguarded without using taxpayers' money."

There are questions over what Ed Balls knew about Mr Flowers' resignation

Mr Flowers has apologised for doing things that were "stupid and wrong" in relation to the drugs claims - but has not elaborated.

Labour Party leader Ed Miliband is also under pressure over when he and shadow chancellor Ed Balls knew that Mr Flowers had resigned as a councillor in Bradford after adult material was found on his computer.

In a letter to Mr Miliband, Conservative Party chairman Grant Shapps wrote: "Was your shadow chancellor, Ed Balls, aware of this when he accepted £50,000 to fund his personal office?

"When you met Mr Flowers on 6 March, 2013, did you discuss the £1.2 million loan agreement that the Labour Party entered into with the Co-operative bank, just weeks later?"

Mr Shapps also challenged Mr Miliband to give details of his private meetings with the minister and explain what advice the former Co-op chairman gave as a member of Labour's business advisory group.

Mr Flowers has also been accused of incompetence and resigned his post as chair in June after a £1.5bn black hole was discovered in its finances.

Mr Flowers was criticised for a stumbling performance in front of MPs

The bank found a massive gap following the purchase of Britannia Building Society in 2009 and abortive attempts to take on hundreds of Lloyds branches.

It now faces a rescue which will see 50 branches close and investors including US hedge funds take control of 70% of the business.

During an appearance before the Commons Treasury committee earlier this month, Mr Flowers stumbled over basic facts and figures relating to the bank.

He was also pressed on whether he had approved the £50,000 donation to Mr Balls while a member of the bank's board.

"My recollection is that we paid for a particular researcher to assist the shadow chancellor in the work that he needed to do, and that we believed to be a legitimate and proper use of resources," he replied.

Co-operative group chairman Len Wardle has resigned over the scandal

A spokesman for Mr Balls said: "The Co-op Group, not the bank, donated £50,000 to the shadow chancellor's office, which was declared in the normal way at the time.

"Ed (Balls) has never discussed the donation with Paul Flowers. Ed's been to a few events which Rev Flowers has also been at, but he's never had a meeting or phone conversation with him."

It has also emerged that the Methodist minister was convicted of gross indecency in 1981, reportedly over a sex act in a public toilet.

A church spokesman said that at the time he went through the "usual procedures" before being allowed to continue in his role. He is currently suspended from his role as minister.

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