Philip Hammond took a personal stake in a food technology company just months before it won a share of a £560,000 Government grant and he became Chancellor, The Telegraph can disclose.

Mr Hammond, when he was Foreign Secretary, took the 15 per cent stake in Cambridgeshire-based Hydramach in October 2015, according to records at Companies House.

Months later – in April 2016 – Hydramach was one of eight companies which won the grant to develop low fat and low sugar soups, ready meals and sauces from Innovate UK, a tech start up quango run by the Department for Business.

Last night a former standards watchdog said Mr Hammond’s failure to make public his shareholding was “a serious failure” because “there is clearly a potential conflict of interest”.

Hydramach has now withdrawn from the consortium. However the first instalment of the money from the grant is due to be paid to the consortium – which includes J Sainsbury and the University of Chester – on February 1.

The project’s title was “reduced fat and salt in soups, sauces and ready meals by utilisation of novel procedures to create novel micro-structures”.

A project description, provided by the eight organisations in the consortium and published by Innovate in the UK in April 2016, describes how the work “will help to facilitate progress on some key government initiatives outlined in the Public Health Responsibility Deal”.