The scrapping of plans to build 149 new council homes is to be the subject of a formal investigation.

Opposition Labour and Tory representatives voted together at last night’s Tower Hamlets council meeting to force an inquiry into the decision to shelve plans for a development at Watts Grove in Bromley-by-Bow.

It was revealed last month that Independent Mayor Lutfur Rahman had ditched the social housing scheme on grounds of “affordability” – with Labour accusing him of “failing residents”.

Tabling a motion on the subject, Labour’s Cllr Carlo Gibbs said: “Because of the worrying state of the council’s finances, he had to drop the proposals.

“This motion orders an investigation into how the mayor contracted this site. This and other sites could be developed in order to deliver much-needed social housing.”

Independent cabinet member Cllr Oliur Rahman responded saying Labour were right to say “housing is a mess” in Tower Hamlets – but he blamed opposition councillors for the shortage.

“They have a nerve to stand up and lecture when they were responsible for selling council homes to social landlords and residents don’t even have a say,” added Cllr Rahman.

The town hall’s overview and scrutiny committee will now investigate the reasons for the collapse of the Watts Grove development.