The elected leader of a local authority has been stripped of key powers by a government 'hit squad'.

The Mayor of Tower Hamlets, Lutfur Rahman, has been forced to hand over control to a team of Commissioners appointed by ministers.

The move follows a damning report by auditors PwC which accused the council of a 'lack of transparency' over the allocation of grants.

Credit: PA

The auditors also criticised the way council taxpayers' money was spent on political propaganda.

The first two Commissioners, Sir Ken Knight and Max Caller, started work at the headquarters of the east London council this morning.

They will take responsibility for hiring and firing senior staff, selling property and handing out grants.

Rahman denies showing favouritism to the local Bangladeshi community.

Eric Pickles Credit: PA

Intervention was not a decision taken lightly however I could not ignore the overwhelming evidence of the council's failure and allow this to continue unchecked. I do not accept the Mayor's representations that problems are easily put right.

ERIC PICKLES MP, COMMUNITIES SECRETARY

Sir Ken Knight is a former London fire chief. He and Mr Caller will be joined by a third commissioner at a later date.

We are determined to restore faith in how Tower Hamlets operates. Local people deserve a council that not only makes decision in an accountable and transparent way but also with the benefit of all residents in mind. Today marks the start of a long but necessary journey to ensure public confidence in the council is restored, community cohesion maintained and that Tower Hamlets is no longer a by-word for poor governance.

SIR KEN KNIGHT, GOVERNMENT COMMISSIONER