RICHARD Sharp has resigned as BBC chairman after a damning report found he broke the rules for public appointments by failing to declare his role in facilitating an £800,000 loan for Boris Johnson.

The outgoing media boss insisted the breach was “inadvertent and not material” but that his resignation was the best way to “prioritise the interests” of the broadcaster. 

He said he would step down in June, giving the government time to appoint a successor. 

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While Mr Sharp - a Conservative donor - did not arrange the loan he introduced his friend Sam Blyth, an extremely wealthy cousin of Mr Johnson, to the Cabinet Secretary, Simon Case.

Mr Blyth then went on to guarantee the £800,000 loan to then prime minister. The identity of the actual lender is not known.

Details of the arrangement only become public earlier this year in an investigation in the Sunday Times, ultimately prompting a review of his appointment by barrister Adam Heppinstall KC.

Mr Sharp was named as the preferred candidate for the BBC job in January 2021 and the Commons Digital, Culture, Media and Sport Committee initially backed his appointment.

He did not disclose his role in helping Mr Johnson secure the cash during the process. 

Mr Heppinstall said Mr Sharp failed to disclose two "potential perceived conflicts of interest" to the panel that interviewed him.

Firstly, that he had told Mr Johnson that he "wished to apply to be chair of the BBC board, before he made his application in November 2020".

Secondly, that he told the cash-strapped Mr Johnson he would make the introduction between Mr Blyth and Mr Case so that he might "assist the former prime minister with his personal finances".

Mr Heppinstall said the breaches may have created a "risk of a perception that Sharp would not be independent from the former prime minister, if appointed".

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In a statement, Mr Sharp said: “Mr Heppinstall’s view is that while I did breach the governance code for public appointments, he states that a breach does not necessarily invalidate an appointment.

“Indeed, I have always maintained the breach was inadvertent and not material, which the facts he lays out substantiate. The Secretary of State has consulted with the BBC Board who support that view.

“Nevertheless, I have decided that it is right to prioritise the interests of the BBC.

“I feel that this matter may well be a distraction from the Corporation’s good work were I to remain in post until the end of my term.

“I have therefore this morning resigned as BBC Chair to the Secretary of State, and to the Board.”

Mr Johnson was remaining tight-lipped as he left his home in London earlier this morning.

The resignation means that the next BBC Chair  - which has a four year term - will be appointed by the Conservative government. 

The SNP called for an "independent inquiry into the behaviour of Boris Johnson in appointing Richard Sharp."

Kirsty Blackman, the party's Cabinet Office spokesperson, said: "This has been a sorry saga for the BBC and has done untold damage to its reputation. Boris Johnson knew about his financial dealings with Richard Sharp before he recommended his appointment as the BBC’s chair.

“It is entirely wrong for people like Richard Sharp, who are big donors to the Tory party to be rewarded with prime public service jobs. The Tories are rotten from top to bottom with sleaze.

“Rishi Sunak must now act to protect the future of the BBC and launch an independent inquiry into the behaviour of Boris Johnson in appointing Richard Sharp. He needs to get to the bottom of what influence Boris Johnson had on the appointment. Sunak should also make a promise that the next chair will not be someone who is a major donor to the Tories."

Responding to the resignation, Liberal Democrat culture spokesperson, Jamie Stone said: "The BBC is the number one source of trusted news, and that depends on proper independence & resilience to political pressure.

"Boris Johnson should never have been allowed to appoint Richard Sharp as BBC Chair.

"We need a rigorous & transparent process to appoint the next Chair."

Labour's Lucy Powell said the breach of the rules has caused "untold damage" to the reputation of the BBC.

She said: "This comes after 13 years of the Tories doing everything they can to defend themselves and their mates.

"From Owen Patterson to Dominic Raab, and now Richard Sharp, instead of doing what’s best for the country the Prime Minister was more interested in defending his old banking boss.

"The Prime Minister should have sacked him weeks ago.

"Instead it took this investigation, called by Labour, to make him resign."

Speaking to press at the Scottish Conservative conference in Glasgow, Prime Minister Rishi Sunak said he was unable to guarantee a non-political figure would replace Mr Sharp.

He said: “There’s an appointments process that happens for those appointments. I’m not going to prejudge that.”

He added: “This is about doing things properly and professionally.

“When concerns are raised, it is right there is a proper process, an independent process that we don’t prejudge, we allow it to carry on, establish the facts of what happened, reach a conclusion.

“That has happened, Richard Sharp has resigned. But it is right that we do these things properly and professionally, I think most people will think that is the right thing to do.”

Asked if Mr Sharp’s replacement should be a non-political appointment, Mr Sunak said he was “focused on delivering for the British people”.

He said: “That is what is I am here talking about today in Scotland, how we can work constructively with the Scottish Government to deliver for the people of Scotland.”