The scandal over Greensill Capital’s influence within government has deepened as it emerged one of Britain’s most senior civil servants began working as an adviser to the finance firm while still serving in Whitehall – with the approval of the Cabinet Office. Downing Street and Cabinet Office sources were said to be “deeply concerned” at the revelation that official approval was given for Bill Crothers to begin advising Greensill in September 2015 while still employed in the civil service. Crothers, who was the government’s chief commercial officer, left that role two months later and went on to become a director of Greensill, gaining a shareholding potentially worth $8m (£5.8m) before the lender collapsed last month. Crothers has denied any wrongdoing and said such outside roles were “not uncommon” – a claim that has caused alarm in Downing Street. Greensill is at the centre of a high-profile lobbying scandal after the former prime minister David Cameron, who was a special adviser to the company’s board and partly paid in share options, was found to have sent texts and emails to ministers as he sought approval for policies that would benefit the lender. On Monday Boris Johnson bowed to pressure to order an independent inquiry. The Guardian understands No 10 has ordered that inquiry to examine the approval process that meant Crothers was given leave to advise the company while still an impartial civil servant. Sources said the approval was given by the former Cabinet Office permanent secretary John Manzoni. Crothers worked as the government’s chief commercial officer from 2012 to 2015, helping to create the Crown Commercial Service, an agency of the Cabinet Office, and earning up to £149,000 a year. He left the civil service two months after he began advising Greensill and became a director of the company in August 2016. The detail was revealed in a letter from Crothers to an official watchdog, published on the government’s website on Tuesday. It had asked him to account for why he had not sought signoff for his 2016 appointment as a Greensill director. In his letter to the advisory committee on business appointments (Acoba), Crothers confirmed he was “given approval to take up a part-time board advisory role with Greensill Capital starting from September 2015, whilst employed as a civil servant”. He said Greensill was then a small firm “which did not conduct any business with UK government”. Crothers added: “This advisory role was not seen as contentious, and I believe not uncommon.” This was questioned by one Whitehall source who said many civil servants applied for advisory roles that were neither commercial nor included a potential conflict of interest, such as positions in charities, school boards or housing associations. The Cabinet Office is understood not to keep records of how many civil servants have advisory roles to firms. One former cabinet minister said the disclosure could severely damage the reputation of senior civil servants. “We have to be able to trust that a civil servant does not have a second job and is completely impartial, or have a public register of their interests as we have for MPs,” they said. The company’s Australian founder, Lex Greensill, had been embedded within government as an adviser on supply chain finance since 2011, brought in by the late former cabinet secretary Sir Jeremy Heywood. However, Greensill Capital did not begin to provide its own services to government until it took over an early payment system for pharmacists in 2018. The head of Acoba, the Conservative peer Eric Pickles, has demanded to see the guidance on the conflicts of interest process that approved Crothers’ appointment. He had previously written to Crothers and the Cabinet Office to ask why Crothers did not seek the watchdog’s advice about his 2016 appointment as a Greensill director. “The lack of transparency around this part-time employment with Greensill may have left the misleading impression that Mr Crothers had wilfully ignored the obligation to seek advice,” he wrote. Company records show Crothers incorporated his own management consultancy in September 2015, named Commercial Common Sense – one of his catchphrases at the Crown Commercial Service, and mirroring its acronym. A December 2016 Acoba letter said “Mr Crothers’ former department had no concerns about him setting up a consultancy”. After leaving office, Crothers held at least five meetings with a Whitehall official between 2016 and 2020. Transparency records show he met Manzoni, who was in charge of the day-to-day running of the Cabinet Office until last year, in April and December 2016, January and May 2018 and February 2020. Transparency documents described the discussions as relating to “commercial capability”, “stakeholder relationship” and “business issues”. Crothers is not declared as having approached Manzoni on behalf of any private company. Crothers also attended a “private drinks” meeting between the health secretary, Matt Hancock, Cameron and Lex Greensill in October 2019, according to the Times. Hancock, asked in parliament on Tuesday about reports he met Greensill for a drink, conceded that “absolutely I attended a social meeting”. He said it was “organised” by Cameron and that “given departmental business came up, I reported to officials in the normal way”. Though Hancock said his actions were “appropriate” and “within the rules”, it raises questions about why it was not before known that he flagged the discussion of “departmental business” with civil servants. The government has refused to explain why Hancock’s comments on the discussions with Greensill that concerned departmental business were not published as part of its quarterly transparency publications. The Guardian revealed on Tuesday that Crothers had a stake in Greensill, which could have been worth much more if the firm had successfully floated on the stock market at the $7bn valuation touted by the lender to potential investors last year. Instead, the company collapsed into administration in early March, rendering shareholdings worthless and putting thousands of jobs indirectly at risk. In a letter to Lord Pickles last week, Crothers said: “I am concerned that there may be a view that I did not follow proper process regarding my role with Greensill Capital. I assure you that I completely respect the required process and your office, took steps to comply, and believe that I did so … “The [Cabinet Office] approval was to be a [Greensill] board adviser, attending board meetings, with the role developing, discussed as becoming a director. This was agreed via the Cabinet Office internal conflicts of interest policy, which advises on how to address real or perceived conflicts of interest.” A Cabinet Office spokesman said: “We have responded to the initial letter from Lord Pickles, and will respond to his further letter in due course. The [new] Boardman review into Greensill Capital and supply chain finance will be wide-ranging and will also consider the issues raised so the public can judge whether they were appropriately handled at the time.” Labour is to force a binding Commons vote on Wednesday to establish a wide-ranging parliamentary inquiry into Cameron and the lobbying scandal, saying the government cannot “mark its own homework”. It will propose setting up a committee of MPs with the power to ask witnesses to give evidence and answer questions, including Cameron and the four cabinet ministers who were lobbied by him. The inquiry would demand that the government publishes all communications relating to Greensill Capital between Cameron, Johnson, Hancock and Sunak, as well as special advisers and senior staff. Labour is unlikely to win the vote in the Commons if Johnson whips Conservatives to oppose it, but it would force the government to explain why it does not wish its own inquiry to be so broad.