Boris Johnson: Inquiry into Jennifer Arcuri links paused as culture secretary defends government grant to former model

London Assembly probe placed on hold after request from police watchdog that is also investigating prime minister's relationship with entrepreneur

Nicky Morgan, the culture secretary, has defended the government's decision to award a grant to an entrepreneur with close links to Boris Johnson, as an investigation into the prime minister was paused at the request of a police watchdog.

Ms Morgan said the payment to Hacker House, owned by Jennifer Arcuri, was the subject of an internal government review but appeared to defend the decision to award the money, which has since been put on hold.

She insisted that it was not unusual for the government to give money to a company that had no income, or to directly approach firms to ask them to apply for government funding.

It came as the London Assembly paused its inquiry into links between Mr Johnson and Ms Arcuri at the request of the Independent Office for Police Conduct, which is also investigating the matter.

Ms Arcuri was a close associate of Mr Johnson during his time as Mayor of London and accompanied him on several overseas trade missions, despite staff deeming her unsuitable for the visits. The former model has refused to deny reports of an affair with the now prime minister.

Last year, the government awarded Hacker House a £100,000 grant to help it develop technology to train people in cyber security. In doing so, it waived a condition saying that grants should not exceed half the company's annual income.

Ms Morgan faced a lengthy grilling on the issue by the Commons digital, culture, media and sport committee.

Asked why the government had given money to Hacker House despite the company appearing to have no real income, she said: "Often start-up companies don't...We all have constituents and others who have set up incorporated companies on an absolute shoe-string and have very little or almost no income in the first year."

Ms Arcuri has claimed that the Department for Digital, Culture, Media and Sport approached her directly to ask her to apply for the funding.

Asked whether this was correct, Ms Morgan said: "Obviously I wasn't a minister at the time...but it wouldn't surprise me because we listen to what people are saying in terms of the development of funding for a whole host of different parts of the department.

"There is undoubtedly a need for more people to be trained in cyber security and this fund is particularly about increasing diversity of those engaged in that sector, and then in terms of actually looking for organisations who are doing valuable work in that area who we can support."

The culture secretary also said she doubted that Ms Arcuri's application for the government grant included any references to Mr Johnson.

She said she had not seen the form but added: "I don't believe that there are any - I doubt very much there is anything referencing [him] but I haven't seen the form. I doubt very much there is any reference to the prime minister."

Ms Morgan said the government's investigation was expected to published before the end of October.

The London Assembly is also looking into whether there was any conflict of interest in Mr Johnson's dealings with Ms Arcuri.

Its oversight committee had been due to meet on Wednesday to decide whether to summon Mr Johnson to give evidence but instead the chair, Len Duvall, announced that the inquiry was being paused.

He said: “The London Assembly respects the IOPC’s remit and will not in any way interfere with its important work. However, the Assembly also has an important role and special powers. We will consider using those powers immediately following the conclusion of the IOPC’s work.

“Subject to that important review by the IOPC, certain people should be on notice that the Assembly may well be knocking on their door sometime soon.”

A third inquiry, commissioned by current London mayor Sadiq Khan, has been scaled back, also after a request from the IOPC.

Mr Khan had asked Kathryn Robinson, a London Fire Bridge lawyer, to look into the decision by London & Partners, the mayor's promotional agency, to give £11,500 to Ms Arcuri in sponsorship and invite her on overseas trade missions with Mr Johnson.

But Ms Robinson will now only review current L&P processes and will not assess any decisions made during Mr Johnson's time as mayor.

A spokesperson for Mr Khan said: “The Mayor’s office has agreed with Kathryn Robinson that she will look into the processes currently in place at London & Partners and the Greater London Authority’s involvement in them, to see if they need to be strengthened. This review will begin shortly, irrespective of the IOPC’s work.

“The IOPC has informed GLA officers that they are concerned that unless the review is limited to current processes, there is a risk it could prejudice the work they are undertaking. Following completion of the IOPC’s processes, the review by Kathryn Robinson and the GLA oversight committee’s investigation, the mayor will consider whether any further steps are required.”