Sir Martin Sorrell this evening faced the biggest crisis in his three decades at the top of WPP as an investigation into allegations of financial and personal misconduct threatened an ignominious end to his glittering career in advertising.

The 73-year-old chief executive, who via relentless dealmaking transformed WPP from an obscure maker of wire baskets into a globe-spanning empire, has categorically denied wrongdoing.

Regardless of its outcome, the investigation was viewed in the City on Wednesday as the greatest public challenge yet to Sir Martin’s grip on the company and one from which it may be difficult for even him to recover.

It is understood that his fate could be decided by the time WPP is due to publish its annual report at the end of this month.

An outside law firm WilmerHale was called in by chairman Roberto Quarta to probe allegations made by a whistleblower. In a statement to the stock exchange today after news of the investigation was leaked to The Wall Street Journal, WPP described the claims as “an allegation of personal misconduct” against Sir Martin.

In his rebuttal the chief executive, who remains in control of WPP’s day-to-day operations, said he had been accused of “financial impropriety”, an allegation that he rejected unreservedly.