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Last Updated: Tuesday, 18 March 2008, 12:02 GMT
Further arrest in City Hall probe
City Hall
An address in Liverpool was also searched
A third man has been arrested over fraud allegations concerning organisations given funds by City Hall.

The 53-year-old was held in Dagenham, east London, on Tuesday when police searched two addresses in the area.

He is being questioned at Belgravia police station in connection with the "non return of overpaid monies".

Police are investigating allegations of fraud in connection with organisations which received funding from the London Development Agency (LDA).

Police also searched an address in Liverpool in Tuesday's operation.

Internal inquiry

It follows allegations about money paid by the LDA, the mayor of London's business arm, to a number of black organisations.

Mr Livingstone's race adviser Lee Jasper, 49, resigned amid allegations over the misuse of public funds.

An internal inquiry in January cleared him of any wrongdoing, but he was suspended by the mayor pending the police investigation.

Two men previously arrested by police have been released on bail and are due to return to Belgravia police station next month.

A Greater London Authority (GLA) spokesperson 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 we will always press for the strongest possible action to be taken."



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