Boris Johnson has ordered a review into Greensill Capital following the David Cameron lobbying controversy.
Top lawyer Nigel Boardman will lead the investigation into the now-collapsed finance firm’s activities in government and the role its founder, Lex Greensill, played.
The Whitehall review will look at how government contracts were secured by Greensill Capital as well as the actions of Mr Cameron.
Confirming a review had now been ordered after weeks of allegations about the links between Mr Greensill, Mr Cameron and government ministers and officials, Mr Johnson‘s official spokesman told reporters: "As you know, there is significant interest in this matter.
"So the prime minister has called for the review to ensure government is completely transparent about such activities and that the public can see for themselves if good value was secured for taxpayers’ money.
"This independent review will also look at how contracts were secured and how business representatives engaged with government."
The prime minister expected the review to be done "thoroughly" and "promptly", the spokesman added.
Mr Cameron this weekend finally commented on the Greensill Capital controversy after weeks of silence.
The ex-prime minister has been revealed to have approached serving ministers and officials about the involvement of Greensill Capital in government-backed financial support schemes during the coronavirus crisis.
This included text messages sent to Chancellor Rishi Sunak.
And it has since been reported Mr Cameron arranged a "private drink" between Health Secretary Matt Hancock and Mr Greensill to discuss a payment scheme later rolled out in the NHS.
Mr Cameron accepted there were "important lessons to be learnt", adding in a statement: "As a former prime minister, I accept that communications with government need to be done through only the most formal of channels, so there can be no room for misinterpretation."
But he stressed he had broken "no codes of conduct and no government rules".
In his statement, Mr Cameron also confirmed he and Mr Greensill had met with Saudia Arabia‘s Crown Prince Mohammed bin Salman, at a time when the Saudi ruler was facing international condemnation over the killing of journalist Jamal Khashoggi.
Mr Cameron said he wanted to help Greensill expand into Saudi Arabia, but that he also "took the opportunity to raise concerns about human rights" with the Saudi leadership.
Greensill Capital, who employed Mr Cameron after he left 10 Downing Street in 2016, collapsed into administration last month.
The company’s demise has threatened thousands of jobs in the UK steel industry, as Greensill was a major financier of Liberty Steel’s owner GFG Alliance.
It has recently emerged that Mr Greensill worked within government while Mr Cameron was in Downing Street, although the ex-premier has denied Mr Greensill was a "close member" of his team and said he had "very little to do" with him at the time.
Mr Boardman is a non-executive board member of the Department for Business, Energy and Industrial Strategy (BEIS).
He recently carried out a review into the awarding of Cabinet Office contracts during the pandemic.
Responding to the announcement of the review into Greensill Capital’s activities, Labour’s Rachel Reeves said: "This has all the hallmarks of another cover-up by the Conservatives.
"Just as with the inquiry into Priti Patel’s alleged bullying, this is another Conservative government attempt to push bad behaviour into the long grass and hope the British public forgets.
"The Conservatives can’t be trusted to yet again mark their own homework.
"We need answers on Greensill now – that means key players in this cronyism scandal like David Cameron, Rishi Sunak and Matt Hancock appearing openly in front of parliament as soon as possible to answer questions."
Meanwhile, human rights campaigners criticised Mr Cameron following his confirmation that he met with Saudi Arabia’s crown prince.
"On top of the questions swirling around about lobbying and the influence of financiers in the heart of government, you have to ask whether former prime ministers should be cosying up to a leader implicated in the grisly cold-blooded murder of a Saudi journalist," said Amnesty International UK’s Kate Allen.
"Mohammed bin Salman’s record is well-known – the crown prince has presided over a brutal human rights crackdown at home and a bloody conflict in neighbouring Yemen, where thousands of civilians have been killed in indiscriminate airstrikes.
"At the same time that Mr Cameron was reportedly enjoying a desert tent banquet with the crown prince, women’s rights activists like Loujain al-Hathloul were languishing in jail after having been tortured and threatened with long jail sentences."