Tower Hamlets Borough Council will effectively come under the control of two new commissioners, stripping the acting mayor and the Tower Hamlets First cabinet of their powers.
Secretary of State Eric Pickles is keen to ensure that no documents and emails are shredded ahead of a possible wider and deeper investigation into the mismanagement of the Town Hall.
The council has until May 6 to respond to the proposals before a final decision is made.
The new commissioners, including a high-ranking police officer, supplement two already in place overseeing the financial decisions of the council. They had already alerted Whitehall that documents were missing.
The letter, dated April 29, demands an immediate written undertaking from the council not to destroy any documents, especially those relating to the disgraced representatives stripped of office – former mayor Lutfur Rahman and former Stepney Green councillor Alibor Choudhury.
The Department for Communities and Local Government wrote to Tower Hamlets following the High Court verdict which found Mr Rahman guilty of corrupt and illegal practices during the mayoral election.
Under the new powers, acting mayor Cllr Oliur Rahman would not be able to make any decision that did not have cross-party and officer support.
This removes the power of Tower Hamlets First to act alone. The party was condemned by Judge Richard Mawrey in the High Court. He said some of its representatives “have little to recommend them beyond their blind loyalty to their leader”. He added he couldn’t ban other THF councillors as they were not named in the original petition.
The letter to head of paid services Stephen Halsey says: “The Secretary of State’s provisional view is that risks of poor governance and financial mismanagement are considerably enhanced by what he considers to be an underlying and continuing culture within the authority as revealed in the judgment.”
Mr Pickles has appointed former Met Assistant Commissioner Chris Allison and Alan Wood, who has experience in Children’s Services to his commissioner team.
A Tower Hamlets spokesman said: “DCLG has outlined its plans for further intervention. We welcome all constructive engagement with the Government and will respond to this matter within the timetable set out.
“Throughout this process, and the parallel process of the Election Petition hearing and judgment, our priority has continued to be the provision of excellent local services to our residents. This continues to be the case.”
Leader of the Conservative Group Cllr Peter Golds said: "The Conservative group welcomes the additional two new commissioners. We also welcome the increased powers given to them by the Secretary of State. We look forward to them examining exactly what has been going on at our council and why things have gone so badly wrong.
“We very much hope that this will be the beginning of the process that will see the council getting back to a situation of good governance which is what the residents of our great borough deserve."