In a blow to Mayor John Biggs’ clean-slate regime, ministers have said that the commissioners installed to oversee Tower Hamlets Council operations must stay until next year.

The commissioners, which cost the taxpayer thousands a month, were introduced to stop the mismanagement of council funds by the previous mayor, Lutfur Rahman.

It was hoped that once he had left office, kicked out following a corruption scandal, the commissioners’ work was also done . But a year after new elections, Secretary of State Greg Clark said: “I share the commissioners’ disappointment of the lost time and lack of progress in certain areas of the intervention.”

He added there was insufficient evidence of “real organisational change” but he did commend the appointment of a new chief executive as a significant move away from the Rahman regime.

Many day-to-day functions have returned to the Town Hall but the commissioners still oversee areas such as grant-making, where Lutfur Rahman made numerous personal interventions to favour his core supporters against officers’ advice.

Communities Secretary Greg Clark

The news comes just days after it emerged that the council was paying a defunct charity hundreds of thousands of pounds in personal care payments. The payments were reaching their intended target but the council is investigating why the mechanics of the money transfer were mishandled.

In a letter, Mr Clark said: “In Tower Hamlets, independent inspectors found a worrying pattern of divisive community politics and serious mismanagement of taxpayers’ money.

“Intervention is never a decision taken lightly but it was essential that we took action to make sure public confidence in the council is restored.

“Under the careful watch of the commissioners, the mayor is making progress but there must be sufficient evidence of real organisational change before I will consider handing any powers back.”

Mr Biggs said he was disappointed with the decision but welcomed acknowledgement of progress.

He said: I want to see the directions lifted, so that local people will again have proper democratic control, so I am of course disappointed that the commissioners remain in place.

“I am committed to ensuring that we meet both the letter and spirit of the government's directions, supported by our new senior officer team.”