POLITICS
19/11/2013 07:12 GMT | Updated 19/11/2013 07:35 GMT

Ed Balls Urged To Return Donation Linked To 'Crystal Meth' Banker Paul Flowers

Parliament UK
Paul Flowers giving evidence to MPs

Ed Balls is facing calls to return a £50,000 donation linked to disgraced banker Paul Flowers following the extraordinary allegations of prostitution and drug taking.

Flowers, a Methodist minister who led the Co-operative bank for three years, is facing a police inquiry after he was reportedly caught buying and using illegal drugs including crystal meth, crack cocaine and ketamine.

The former councillor has been suspended by the Labour Party and the Methodist Church and apologised after being filmed buying the substances days after being grilled by the Treasury Select Committee over the bank's disastrous performance.

The Daily Telegraph reports that in 2012 the shadow chancellor received £50,000 from the Co-op Group. Conservative committee member Brooks Newmark told paper: "The Rev Flowers’s judgment was clearly impaired if he was prepared to give Ed Balls £50,000. Mr Balls should now ask himself whether it is right to accept that money, and consider giving it back."

In a further twist to the story, The Sun reported today that Flowers used his work email account to arrange to meet male escorts at a Manchester hotel for, what the paper described as, "drug-fuelled romps with rent boys".

Committee member Jesse Norman told Channel 4 News on Monday evening that Flowers had "embarrassed and betrayed" both himself and the bank. "The tragedy is that he has embarrassed and betrayed not merely himself but also the Co-op, the bank and the Co-operative movement more generally. You have no idea about these characters. Who knows what evil lurks, it's just extraordinary," he said.

A spokesman for Balls said: "This was a donation from the Co-op Group, not the bank. We never discussed it with the Rev Flowers and it was declared in the Register of Members’ Interests."

The scandal is just the latest in a series to hit the banking industry since the financial crisis of 2008 - including the revelations that the Libor rate was being rigged and public outrage over the bonuses awarded to bankers in the wake of the crash.

Other Conservative MPs suggested the reaction would have been harsher had their party been linked to the revelations. Stewart Jackson tweeted: "Imagine the wave of hysteria & moral outrage if Paul Flowers had been a Tory supporting banker meeting David Cameron in his private office."

And Robert Halfon suggested a solution for the bank. "If they sack Mayor Rob Ford as Mayor of Toronto he can always apply for Chair of UK Co Op Bank. Seems to have the right experience."

On Tuesday morning Len Wardle, the long-standing chairman of the Cooperative Group, announced he had resigned with immediate effect after he admitted "serious questions" were raised by the drugs scandal.

The Co-operative Bank is facing a rescue plan which will see majority control turned over to investors including US hedge funds, after it was left with a £1.5 billion gap in its finances. The group, which employs 100,000 people, plunged to £559 million losses in the first half of the year, weighed down by its banking arm.