The head of the watchdog probing the appointment of the BBC chairman has stepped back because of past contact between the pair.
William Shawcross, the commissioner for public appointments, was set to examine how Richard Sharp got the job.
It followed controversy over Mr Sharp’s role in loan talks involving then prime minister Boris Johnson, who nominated him for the role.
The government has insisted Mr Sharp was appointed on merit.
An alternative investigator is set to be drafted in to review how the appointment, announced in January 2021, was made.
Labour’s shadow culture secretary Lucy Powell appeared to raise a question about the timing of Mr Shawcross’s announcement, tweeting: “It’s taken him a week to realise a conflict of interest”.
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Mr Shawcross revealed his decision to step back from the probe in a letter to the chair of the Commons Digital, Culture, Media and Sport Committee.
In the letter, he added he had decided on the move because he had met Mr Sharp on “previous occasions,” without offering further details. He did not give a timeline for when his replacement would be found.
Mr Sharp’s appointment is also set to be examined in a separate probe from the BBC board, which will examine his current personal interests for any conflicts.
The former Goldman Sachs banker has admitted he set up a meeting between Sam Blyth, a wealthy Canadian and distant relative of Mr Johnson, with Cabinet Secretary Simon Case in late 2020.
He has denied involvement in arranging a loan or giving financial advice.
In a BBC interview last week, he said Mr Blyth had offered to act as guarantor on a loan – reportedly worth up to £800,000 – after reading about the PM’s money troubles in the media.
At the time, Mr Sharp was working as a Treasury adviser on support for businesses during the pandemic, but had already applied for the senior BBC role.
He was advised not to have any further involvement in discussions about the PM’s personal finances, he told the BBC, as it could be perceived as a conflict of interest.
He said he had no further involvement beyond that meeting – and insisted Mr Johnson’s personal finances were not discussed at a dinner he attended with Mr Johnson and Mr Blyth in May 2021, three months after starting his BBC role.
Mr Sharp said he would not quit, but expressed some regret over offering to engineer the meeting with the cabinet secretary.
He said: “With all this fuss, with the benefit of hindsight, particularly at that time I might have said ‘Do it yourself’, but I was working in Downing Street at the time as the economic adviser to support industries”.
Mr Sharp was announced as the government’s choice for new BBC chairman in January 2021.
In the role, he heads the board that sets the corporation’s strategic direction and is responsible for upholding its independence.
The government’s choice is ultimately decided by the prime minister, on the advice of the culture secretary, who is in turn advised by a panel of experts.