LABOUR councillors have launched a scathing attack on a peer who claimed a cabinet member wanted to keep questions about the mismanagement of money for deprived areas out of the public domain.

Lord Toby Harris has taken a personal interest in the scandal over the use of the Neighbourhood Renewal Fund (NRF) money in Waltham Forest and has raised the issue in Parliament.

However, he is refusing to name the Labour councillor who allegedly left him a message which implied questions about NRF should be kept “within the party”.

But his comments have prompted a furious response from Labour councillors who have accused Lord Harris of “grandstanding to the press”.

Lord Harris, the home secretary’s advisor on the Metropolitan Police Authority, said he does not think it is appropriate to name the councillor in question as the message was private and he did not keep a copy of it.

However, he stood by his decision to go public saying: “There has been a dearth of information and a resistance in the local authority to shed sufficient light on all of this.

“The problem is that at each stage of the process (the council) have had to be pressurised into saying anything.”

A statement issued by the Labour Group said: “Lord Harris’s insinuations and attempted smears of unnamed individuals do him no credit.

“it is certainly true that the Labour group and the council as a whole would appreciate him bringing his concerns directly to us rather than grandstanding to the press.

“if he had, he may have understood exactly what was happening in this area.

"We find it hard to understand his increasing exasperation with the Labour Group leadership when he has not bothered to contact anyone in the Labour Group at any stage.

“This has more to do with Lord Harris and his ego than anything to do with NRF.”

Lord Harris responded by saying: “I have not sought to grandstand, but have merely asked questions (as have many others) and not received substantive or satisfactory replies.”

The council has agreed to broaden the scope of a review into how the authority has responded to its failure to correctly allocate, administer and monitor millions of pounds of NRF spending over a number of years.

Documents show officers regularly bypassed rules to prevent fraud and many projects were not monitored for effectiveness or value for money.

Police are currently investigating allegations that EduAction, the company which used to run education in the borough, used NRF to boost profits.

No arrests have been made.