Labour has demanded Parliament's standards watchdog probes claims that the BBC chairman helped Boris Johnson guarantee a loan of up to £800,000 - weeks before he was recommended for the job by the then-PM.
Reports emerged last week that the big-spending ex-PM's distant Canadian cousin stepped in to help Mr Johnson fund his lavish lifestyle when he found himself in financial trouble in 2020.
Millionaire Sam Blyth acted as a guarantor to up to £800,000 of credit to fund the ex-PM’s “day-to-day expenses”, according to the Sunday Times.
Richard Sharp, a former Tory donor who is now BBC chair, admitted introducing Mr Blyth to civil service boss Simon Case but said there was "no conflict" and he had no further involvement.
The paper said Mr Johnson, Mr Sharp and Mr Blyth then had dinner at Chequers before the loan was finalised, though the trio denied discussing Mr Johnson's finances.
Mr Sharp, a former Goldman Sachs banker, had already submitted an application to be chairman of the BBC at the time. He was announced as the Government's choice for the role in January 2021.
Labour has now written to Parliamentary Commissioner for Standards Daniel Greenberg over the allegations as the party warned Mr Johnson risked dragging the Tories into "yet another quagmire of sleaze".
A spokesperson for Mr Johnson dismissed the report as "rubbish" and insisted his financial arrangements "have been properly declared".
"Richard Sharp has never given any financial advice to Boris Johnson, nor has Mr Johnson sought any financial advice from him," the spokesman said.
Of Mr Johnson's private dinner with Mr Sharp, an old friend, and Mr Blyth, who is a distant relative, the spokesman said: "So what? Big deal."
Mr Sharp told The Sunday Times: "There is not a conflict when I simply connected, at his request, Mr Blyth with the cabinet secretary and had no further involvement whatsoever."
A BBC spokesman said: "The BBC plays no role in the recruitment of the chair and any questions are a matter for the Government."
Foreign Secretary James Cleverly was repeatedly pressed on the row on Sunday morning.
He told Sky's Sophy Ridge on Sunday: "I've not had conversations with either of those parties about that situation.
"I have met with Richard Sharp, we discussed the World Service, he struck me as an incredibly competent, experienced, thoughtful individual. I can see exactly why he has the attributes, both personal and professional, to be the chair of the BBC.
"So, as far as I can see, his appointment was made on those merits."
A Cabinet Office spokesperson said: "Richard Sharp was appointed as Chairman of the BBC following a rigorous appointments process including assessment by a panel of experts, constituted according to the public appointments code.
"There was additional pre-appointment scrutiny by a House of Commons Select Committee which confirmed Mr Sharp's appointment. All the correct recruitment processes were followed.
"The recruitment process is set out clearly and transparently in the Governance Code on Public Appointments and overseen by the Commissioner for Public Appointments."
In the letter to Mr Greenberg, Labour chairwoman Anneliese Dodds called for an urgent investigation - and pointed to the MPs' code of conduct which states "holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties".
She said she was concerned that Mr Johnson "may have breached this section by asking for an individual to facilitate a guarantee on a loan whom he would later appoint to a senior public role".
"The lack of transparency around it, like that of the issue raised around Mr Blyth, may give the impression that this was a quid pro quo arrangement," she added.
It comes after Labour demanded a probe earlier this week into reports that Mr Johnson used Mr Blyth, reportedly worth $50million, to act as a guarantor for an £800,000 credit facility.
Ms Dodds raised concerns that neither alleged arrangement was properly declared.
She said: "The financial affairs of this disgraced former Prime Minister just keep getting murkier, dragging the Conservative Party deeper into yet another quagmire of sleaze.
"Serious questions need to be asked of Johnson: why has this money never been declared, and what exactly did he promise these very generous friends in return for such lavish loans?"
Separately Mr Blyth - a friend of the ex-PM’s father Stanley - is said to have given Mr Johnson and wife Carrie free use of his luxury villa in the Dominican Republic, normally rented for up to $5,000 a night.
Mr Johnson flew from the Caribbean trip in October for an abortive leadership bid after Liz Truss was ousted from No10.
Mr Johnson has previously found himself in hot water over his finances, after his divorce from his ex-wife Marina Wheeler, with at least seven children to support.
Despite his £159,000 salary as PM and earning more than £1million since he left No10, Mr Johnson has relied on benefactors to fund his lifestyle.
He received help from Tory donor, Lord Brownlow, for a lavish revamp of the Downing Street flat - before funding it from his own pocket after a massive backlash.
Mr Johnson and his wife Carrie have been having their accommodation bankrolled by billionaire Tory donor Lord Bamford and his wife Lady Bamford since he was booted from office.
