Housing secretary Robert Jenrick will face questions in parliament over approving a controversial £1bn housing scheme linked to Tory donor Richard Desmond.

In January, the cabinet minister gave the go ahead to a 1,500-home development at the former Westferry Printworks site on London’s Isle of Dogs, despite the scheme being rejected by the local council and then the independent Planning Inspectorate because it didn’t contain enough affordable housing.

The nod came just a day before Tower Hamlets Council approved a new rate for its Community Infrastructure Levy (CIL) – a move that would have increased the property owner’s financial liability to the authority by between £30m and £50m. A £50m boost would pay for the council’s housing services budget for almost five years.

The building used to be the Daily Express printworks on the Millwall waterfront and sits on land owned by Northern & Shell, a company in turn owned by media mogul Desmond. Northern & Shell gave the Tory party £10,000 in 2017. It also gave £1.3m to Ukip in 2014 and 2015.

It was previously revealed Jenrick gave the go-ahead to the redevelopment project just weeks after he was lobbied by Desmond at a Conservative party fundraising dinner. The Mail on Sunday reported that Desmond sat next to Jenrick at the bash in November last year.

Jenrick’s spokesperson confirmed that Desmond and his team raised the planning application by Northern & Shell for the Westferry Printworks at the dinner but said the housing secretary immediately curtailed the conversation.

A report by the Daily Mail on Wednesday revealed figures from the Electoral Commission showing Desmond gave the Tories £12,000 two weeks after the controversial decision was made.

Last month, Jenrick conceded his sign-off of the scheme was “unlawful by reason of apparent bias” and confirmed his approval was deliberately issued before the new CIL policy could be adopted. The move meant Jenrick was able to avoid publishing correspondence relating to the application in open court as part of a judicial review of his decision triggered by Tower Hamlets Council. His planning permission has been quashed and is to be decided by a different minister.

On Thursday, the Labour Party will question the secretary of state in the House of Commons after calling an urgent ministerial question.

It will again urge Jenrick to publish all documents and correspondence relating to his decision, disclose details of his conversation with Desmond, and reveal what discussions he had with his department over the money the developer would have been liable for.

Steve Reed, Labour’s shadow housing and local government secretary, said: “Communities must have confidence that the planning process is fair and transparent, but the unanswered questions around Robert Jenrick’s unlawful decision have weakened that trust.  

“It is unprecedented for a secretary of state to admit to bias – and there are fears he did it to avoid being forced to reveal the truth behind his decision in open court.    

“It’s time for Mr Jenrick to come clean and answer these crucial questions about why he overruled his own inspector to grant planning permission for a billionaire Conservative Party donor to build a luxury development and dodge a £50m tax bill shortly after they dined together at a glitzy fundraising dinner – Mr Jenrick must prove it’s not one rule for the Conservatives and their wealthy donors but another rule for everyone else.”   

At prime minister’s questions last week, Boris Johnson was quizzed over what he knew about the controversial development after it emerged the PM had waved through a version of the same scheme four years ago when he was mayor of London.

HuffPost UK reported last week that police are “assessing” an allegation about Jenrick’s decision. The Labour Party has already called for the Cabinet Office to examine the case.

Meanwhile, the elected mayor of the London borough in which the development sits has said neighbours are “furious” over Jenrick’s decision. He, too, has written to the Cabinet Office to demand an investigation into the secretary of state’s intervention.

In his letter to the Cabinet Office, Tower Hamlets mayor John Biggs said ministers should “not use their power” to prevent developers contributing to the local community.

He wrote: “I think we need a full and independent investigation into whether by awarding planning permission Mr Jenrick may have acted unlawfully following lobbying from the developer. If this had taken place, as some reports have suggested, this would be in clear breach of the ministerial code and potentially the law.”

Biggs continued: “As elected mayor for Tower Hamlets I know residents are furious at the way this planning application has been handled. Planning decisions such as these have a huge impact on the lives of my residents – influencing how many much-needed affordable homes families in our borough can access and how much money will go into the local services they rely on.

“They change the shape and character of our communities and the Westferry decision would have been cited by applicants in setting a precedent for how high developments in this area could be, which would have had a far greater impact on the lives of residents and the Isle of Dogs for years to come.”

He added it was “vital” that the public could have confidence in the planning system, adding: “The potential that a decision of this gravity was corrupted by illegitimate contact between the secretary of state and the developer fundamentally undermines that confidence.”

In an interview two weeks ago, Jenrick said the application was decided “on its merits” and done “without any actual bias”.

He added: “But clearly the way that the process was run gave rise to some concerns and so that’s why we’ve chosen to quash the decision.”

MHCLG said last week: “While we reject the suggestion that there was any actual bias in the decision, we have agreed that the application will be redetermined.”

A Cabinet Office spokesperson said: “We will respond to correspondence on this matter in due course.”