The man behind a Clapham taxi school has been arrested by police investigating allegations of fraud surrounding former mayoral aide Lee Jasper.

Greg Nowell, 61, was arrested yesterday at his Harrow home and questioned about money laundering.

According to the Daily Mail, Mr Nowell ran the Green Badge Taxi School, a project in Clapham offering courses in the "knowledge" for would-be taxi drivers from ethnic minorities.

The Met Police said in a statement that a man, 61, was arrested for money laundering at a Harrow address and was taken to Belgravia police station where he has bailed to return to March 13.

A house in Croydon was yesterday searched by police investigating allegations of fraud surrounding former mayoral aide Mr Jasper.

The Met Police say they raided the houses in Harrow, Tottenham and Croydon after fraud allegations concerning six publicly funded organisations were referred to them.

Scotland Yard has previously investigated one of the London mayor's former aides Lee Jasper.

Mr Jasper, 49, who resigned as Ken Livingstone's adviser on race relations last Wednesday, was investigated after claims of wrongdoing in the way £3.8million worth of LDA grants were given to six groups run by Mr Jasper's friends or associates.

But detectives said they found nothing criminal in the way the money was awarded.

An internal review by the LDA which was published in January said there was no evidence against Mr Jasper to support charges of "corruption and collusion" in the awarding of the grants.

Mr Jasper quit his £120,000 a year post after steamy emails he sent to a community project worker were printed.

Mr Livingstone has insisted Mr Jasper has done nothing wrong and wants to reinstate him.

A spokesman for Ken Livingstone said: "The GLA will naturally not comment on any individual arrest or an ongoing police investigation which has not been tried before a court.

"However, in the event that any money is proven to have been illegally taken from any project associated with the GLA or LDA, the Mayor will naturally always press for the strongest possible action to be taken."

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