Introducing Mr Mapp, Tony's new crony at Sport England

A millionaire Labour donor with close links to John Prescott has been made head of English sport's main funding body.

Derek Mapp, a wealthy entrepreneur, was quietly named the new chairman of Sport England, which distributes hundreds of millions of pounds in lottery funding, two weeks ago.

But today senior Tories are demanding an inquiry into the appointment following an Independent on Sunday investigation into his links to senior Labour politicians.

Mr Mapp, himself a former Labour councillor, has twice given the Deputy Prime Minister and his wife, Pauline, the keys to his luxury holiday apartment in Majorca. Mr Prescott, who appointed Mr Mapp head of the East Midlands Development Agency (Emda) in 1998, paid a market rent for the apartment in exclusive Port d'Andratx.

Mr Mapp also has extensive links to Richard Caborn, the sports minister. Mr Caborn, the Deputy Prime Minister's closest political ally, told the IoS he has known Mr Mapp for "more than 30 years". The two men first met during negotiations over a brewery in Mansfield, he said.

Mr Mapp, who made a £3,000 donation to Labour two years ago, made his fortune in public houses and a chain of nurseries. In 1996 Mr Prescott was a guest of honour at the opening of a pub in Newark, Nottinghamshire, owned by Mr Mapp's firm, Tom Cobleigh.

Cherie Blair, in her professional capacity as a QC, represented Mr Mapp's Leapfrog nursery business in a planning dispute with Northamptonshire County Council in 1998. A Conservative councillor later expressed surprise that such a senior barrister was involved in a "pettifogging dispute", usually the preserve of "the local jobbing solicitor".

The presence of the Prime Minister's wife at a local planning hearing might be explained by the fact that Mr Prescott's daughter-in-law, Ashlie Prescott, was a solicitor in the Hull firm Gosschalks that reportedly handled Mr Mapp's legal affairs. Mr Mapp and his wife attended the wedding of Jonathan and Ashlie Prescott in 2002.

As head of the Emda, Mr Mapp is credited with persuading Formula 1 to continue holding Grand Prix events at Silverstone after Bernie Ecclestone had threatened to pull out. Labour was forced to repay a £1m donation to Mr Ecclestone shortly after the 1997 election amid concerns it had influenced a decision to exempt F1 from a ban on tobacco advertising.

Officials from the Department for Culture, Media and Sport insist that the appointment of Mr Mapp to the two-day-a-week, £32,000-a-year job was made "on merit" and was carried out in strict accordance with rules laid down by the Office for Public Appointments. The department refused to release the minutes of the meeting of the assessment panel or name its members.

However the IoS has learnt that of five applicants two were recommended to Tessa Jowell, the Secretary of State for Culture, Media and Sport: Sir Andrew Foster and Derek Mapp. Sir Andrew is a former chief executive of the Audit Commission, a board member of Sport England and the author of a major report on athletics in the UK. Ms Jowell chose Mr Mapp. Her decision was then approved by Tony Blair. Chris Grayling, shadow transport minister, called on the Government to publish all relevant paperwork to prove that it was "above board".

Hugh Robertson, shadow sport minister, said: "The Government should have recruited someone of the very highest quality for Sport England - not simply looked around the Labour Party for someone who might put party loyalty before sport."

However, Mr Caborn accused the Tories of mischief-making, insisting that Mr Mapp had proved his worth during two terms as head of the Emda. A spokeswoman for Sport England said Mr Mapp was "focusing on the job of developing grassroots sport in England".

A press release on the appointment, slipped out on a Friday afternoon before the Conservative Party conference, was, unusually, not forwarded to the Press Association. It was reported, without comment, in the sports pages of only two newspapers the following week. The release said that Mr Mapp is a "keen follower of sport and is a particularly avid supporter of rugby league and the Warrington Wolves. He also enjoys football and golf."

* A group of wealthy business leaders finally identified themselves yesterday as donors to the Tories, following criticism of their "secretive" links to the party.

The Midlands Industrial Council (MIC) published an "exhaustive" list of its members in a bid to quell the speculation. The group of business leaders is thought to have donated millions of pounds to help the party, but most members have remained anonymous until now.

Labour has previously called on the Tory leader, David Cameron, to prove that the MIC is above board by publishing a list of those involved, and urged the Electoral Commission to probe its political donations. Names already known include the JCB boss Sir Anthony Bamford and Robert Edmiston, who has been questioned by police over the cash-for honours affair.

A Tory spokeswoman said: "David Cameron strongly supports the move towards greater transparency. We warmly welcome the decision by the MIC."