Benita Mehra had been the target of fury from survivors and bereaved of 2017 tragedy

A key member of the Grenfell Tower public inquiry has resigned after fury among survivors and the bereaved at her links to the company that made the combustible cladding.

Less than 48 hours before the inquiry is due to start hearing evidence about “decisions which led to the installation of a highly combustible cladding system”, Boris Johnson announced Benita Mehra was standing down from a panel advising the chairman of the inquiry, Sir Martin Moore-Bick. It followed 10 days of rising pressure on the prime minister from the community devastated by the fire on 14 June 2017 – which claimed 72 lives – to reverse her appointment.

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The Guardian revealed last week that Mehra, an engineer, previously ran an organisation which received a £71,000 grant from the Arconic Foundation, the philanthropic arm of the conglomerate which supplied the aluminium composite cladding panels which burned like petrol.

Survivors said her selection, formally made by Johnson, was a clear conflict of interest and some threatened to withdraw participation if she remained. The inquiry has already concluded the Arconic panels were the main cause of the spread of fire and lawyers for the firm are due to give their opening statement on Tuesday.

Johnson said on Saturday evening that he had accepted her resignation, adding: “As the inquiry’s phase two hearings begin, we remain completely committed to getting to the truth of what happened, learning lessons and delivering justice for the victims.”

In her resignation letter to Johnson, Mehra said she had made “a regrettable oversight” by not connecting the grant her organisation received to the work of the inquiry and that she was resigning “with deepest regret”.

Facebook Twitter Pinterest Benita Mehra said she had made ‘a regrettable oversight’. Photograph: Jeff Spicer/Getty Images

Mehra was appointed on 23 December, but her links to Arconic only emerged this month when members of Grenfell United (GU), the survivors and bereaved group, found that when Mehra was president of the Women’s Engineering Society she helped draft a successful grant application to the Arconic Foundation in 2017. The £71,000 grant was the charity’s largest single grant that year and was spent on a mentoring programme that ended in December 2019. Mehra remains a trustee of the charity.

The Arconic Foundation’s board of directors includes several senior Arconic executives and its stated goal is to support the company’s mission by making grants in countries where it trades.

Mehra said it was apparent her link to the donation “has caused serious concerns to a number of the bereaved, survivors and residents core participants”, but she stressed that she had never spoken to anyone at the Arconic Foundation and her only role had been to review the initial proposal.

Accepting her resignation, Johnson’s private secretary, Emily Beynon, said that the Cabinet Office “having made further inquiries into your case, have said that they continue to believe that there is no conflict of interest that would have prevented you from taking part in the Inquiry.”

But GU had described her selection as “a slap in the face” and shadow housing secretary, John Healey, called for her to be removed. As pressure rose on Johnson last week the London mayor, Sadiq Khan, said the situation was “another major blow for the … community [which] epitomises the careless approach this government continues to take in the aftermath of this tragedy”.

Survivors and the bereaved said Mehra had done “the dignified thing by resigning” and it “helps lift growing anxiety ahead of phase two”.

However, a spokesperson for GU said: “The government should never have put families in this situation, they failed to carry out basic checks and understand the importance and sensitivities around a fair and proper process. We still have questions for both the inquiry team and Cabinet Office to answer, as to how this situation was ever allowed to happen.

“The government promised two panel members and must now urgently find a new panellist, to bring expertise on community relations to the inquiry. We do not need the pretence of diversity for the sakes of diversity. The panel does not need another technical expert where we already have ample provision.”

Khan said: “This appointment should never have been made in the first place. The inquiry must have the relevant expertise as well as the confidence of the community, survivors and the bereaved, so they can get the justice they deserve.”

Even before the link emerged, the survivors and bereaved were concerned at Mehra’s appointment. They had campaigned for months for a panel to lead the inquiry because they believed Moore-Bick, a retired appeal court judge, was not equipped alone to probe the social and political aspects of the disaster. They wanted additional experts with experience of social housing and community relations.

The campaign was backed by a public petition and the musician Stormzy and finally Theresa May, then prime minister, relented. She appointed Prof Nabeel Hamdi, an expert in housing and planning issues, alongside a construction industry expert. When Hamdi unexpectedly stood down, Johnson replaced him with Mehra, who lacked the experience the community wanted.

Johnson had in December assured Moore-Bick that due diligence “has not identified any concerns” and that Mehra “is not aware of any conflict of interest.”

In a letter sent to Mehra on Friday from Howe & Co, a legal firm representing 65 of the core participants, she was told “they do not consider you to be an independent, impartial panel decision-maker. They believe there is a clear appearance of bias on your part.”

It quoted one inquiry participant saying: “I strongly disagree with her sitting on the panel and I personally, and many survivors and bereaved families, believe the inquiry should not start while she is appointed.”

Another said: “The appointment of Ms Mehra to the panel is not right. She has a clear conflict of interest. If Ms Mehra remains, the inquiry would no longer be legitimate. I would have no confidence in the inquiry or its process. If she does not stand down or is not removed I will consider boycotting the inquiry.”

The Cabinet Office had said “the Arconic Foundation donated to a specific scheme which provides mentoring for women in engineering and is unrelated to the issues being considered by the inquiry.”

The inquiry also insisted her former role “does not affect her impartiality as a panel member”.

After a year-long hiatus, the inquiry is due to restart hearings at new premises in Paddington on Monday. Phase one in 2018 examined the night of the fire on 14 June 2017 and found the cladding was the main source of fire spread and it breached building regulations. Phase two, which is scheduled to take evidence for 18 months, will examine decisions taken in the months and years before the fire, its immediate aftermath and the role of government.