Guardian News and Media/London

Ed Miliband has distanced himself from Paul Flowers, the Co-op Bank chairman accused of financial incompetence and buying hard drugs.

The Labour leader spoke about the disgraced bank boss after David Cameron tried to drag the opposition into the scandal over its loose links to the Co-op movement.

His comments came as it emerged that Flowers left a drug charity after an investigation over his expenses claims.

He was suspended from the Lifeline Project in 2004, where he was a trustee on the board of the organisation, the charity said.

Asked about his relationship to Flowers, Miliband told ITV News: “Flowers was somebody who I met with on one occasion and had meetings with a wider group on a couple of other occasions. He was never my close adviser.

“The important thing now is to make sure that the Co-op can go from strength to strength in the future and the police need to look at any matters that arise for them.”

Asked if he welcomed the inquiry, Miliband said: “Let’s see what the government proposes. What I am utterly confident about is the Labour party always acts with the utmost integrity and we did on this occasion too.”

Labour claimed George Osborne, had questions to answer following a Financial Times report suggesting the chancellor pressed for the Co-operative Bank to be spared from tougher capital rules imposed by Brussels.

The shadow chief secretary to the Treasury, Chris Leslie, said: “There are now serious questions for Osborne to answer about how the Co-operative Bank got into trouble on his watch and his role over the last three years.

“The chancellor and his ministers actively encouraged the bank’s failed bid for 632 Lloyds branches, with reports of 30 ministerial meetings to smooth the way for this deal. What due diligence was done by the chancellor and the Treasury into the state of the Co-op Bank and its leadership? And why did the chancellor argue in Brussels for the Co-op Bank to be spared from tougher rules?

“If Cameron wants a proper inquiry into what went wrong at the Co-op Bank, then George Osborne will have to answer all these questions.”

Nick Clegg, the deputy prime minister, on his LBC 97.3 phone-in show, said: “It all sounds extremely murky to me. Obviously we’ve got these inquiries, three different inquiries a police one, one from the regulators, another one set up by the chancellor to understand how on earth this guy was appointed to the head of this bank in the first place.

“There are some very searching questions to be asked and I’m sure the Labour party will want to both account for itself but also make sure that, in addition to all the question marks that still exist about the way in which they act almost as puppets on the end of a string for the trade union bosses, that they are not also in hock to some slightly off characters at this bank.”