The chair of the Treasury body responsible for lending billions of pounds to councils has been forced to resign, after weekend newspaper reports revealed he failed to declare his personal bankruptcy.

The Mail on Sunday revealed that Tony Caplin, who became a Public Works Loan Board commissioner in 2003, and was due to step down in 2015, was declared bankrupt by the High Court in 2012 with undischarged debts of around £3m – including around £200,000 owed to the tax authorities.

Mr Caplin was appointed in 2013 as chairman for the PWLB, which is an independent and unpaid statutory body.