The civil service boss of the business department denied on Thursday that her officials applied pressure to ensure that collapsed lender Greensill Capital was approved to issue Government-backed loans.

Sarah Munby said that her officials merely asked the British Business Bank, an independent body which ran the loans schemes, if and when Greensill would be accredited for the loans.

Ms Munby is permanent secretary for the Department for Business, Energy and Industrial Strategy (BEIS).

According to a National Audit Office report from earlier this month, the bank felt that BEIS had shown “unusual” levels of interest in Greensill’s application to the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Greensill later lent money under the scheme to several companies in GFG Alliance, the group behind Liberty Steel.

Ties between GFG and Greensill are now being probed by the Serious Fraud Office.

Ms Munby said: “If you go through those emails … they are not putting pressure on the BBB to accredit Greensill, they are asking the BBB when will you accredit or not accredit Greensill?

“The reason we asked that question several times is because at that point our steel team were in very active live discussions not just with Liberty but with a whole range of steel companies about the impact of the pandemic, and working out what the different paths might be to provide Government support where it was needed and where it made sense, into those steel companies.”

Greensill was ultimately accredited to lend and used the accreditation to lend £350 million in several loans to companies that are part of steel tycoon Sanjeev Gupta’s GFG Alliance, despite Greensill only being allowed to lend a maximum of £50 million to a single group under the scheme.

It is thought that Greensill believed it could lend that money because GFG is just a loose term for companies owned by Mr Gupta and his family, rather than a formal group.

BBB chief executive Catherine Lewis La Torre said: “In our view, whilst there was an unusual level of interest from BEIS, that didn’t have any impact at all on the decisions that we took with the accreditation in respect to Greensill.”

It comes as MPs said the level of “freedom and authority” that financier Lex Greensill had across Government was not “desirable”.

We would not expect consultants to have the freedom or authority to act in ways that Mr Greensill did and nor is it desirable that they should

The Public Administration and Constitutional Affairs Committee (PACAC), in a report released on Thursday, said there were no conflicts of interest when the founder of now-defunct Greensill Capital was hired by the Government in 2012, or in relation to the award of the Pharmaceutical Early Payments Scheme (PEPS) after he had left Government service.

But the committee said it was “surprised at the autonomy” Mr Greensill had enjoyed.

In its report, MPs said: “Despite being a consultant attached to the Cabinet Office, Mr Greensill was able to act as a ‘senior adviser’ in the Prime Minister’s Office and had access to Number 10 premises and equipment.

“We would not expect consultants to have the freedom or authority to act in ways that Mr Greensill did and nor is it desirable that they should.”

Mr Greensill had declined to give evidence to the committee.

“We consider his reticence to co-operate inconsistent with the ethos of public service,” the report said.