Outsourcing company Capita has announced that Executive Chairman Rod Aldridge has taken the decision to step down over "spurious" claims regarding a loan to the Labour party.

Commenting on his decision, Mr Aldridge said: "As founder and Chairman of Capita, I have always seen it as my role to ensure that the group enjoys the highest possible standing and operates with total integrity.

"At present, the group's reputation is being questioned because of my personal decision to lend money to the Labour party. As I have made clear, this was entirely my own decision as an individual, made in good faith as a long standing supporter of the party." He said: "There have been suggestions that this loan has resulted in the group being awarded government contracts. This is entirely spurious. Whilst anyone who is associated with the public procurement process would understand that this view has no credibility, I do not want this misconception to continue, as I remain passionate about the group's wellbeing."

However, Mr Aldridge said that he had relinquished his role as Executive Chairman and would retire from the board in July.

On behalf of the Capita Board, Chief Executive, Paul Pindar said: "Rod has played a key role in establishing Capita as the leading service transformation partner to both public and private organisations across the UK. His dedication to improving the efficiency and quality of services in the UK is immense. We are sure Rod will enjoy similar successes as he focuses on his other interests. He has been a supportive and inspirational colleague and friend and the entire board extends its thanks to him. We wish him every success in the future."

Mr Aldridge said he would dedicate his time to pursuing interests in the field of education and creating opportunities for young people both through his work in the voluntary sector and his charitable trust.

The Electoral Commission is in the process of finalising changes to the guidelines for party political fundraising.

The House of Commons constitutional affairs committee is examining party funding sources, funding safeguards and capping permissible donations.

Earlier this week the Metropolitan Police Service said that it was to investigate three complaints made in respect of loans given to the Labour Party.

The Honours Act 1925 makes it illegal to provide titles for donations or loans made to a political party.

(SP/KMcA)