Ministers are to intervene in the management of Tower Hamlets after inspectors raised the alarm about the leadership of the east London authority’s controversial mayor, Lutfur Rahman.

Sources have told the Guardian the government has decided to appoint an envoy to monitor management decisions at the council, which has been dogged by a series of controversies about public spending and senior-level appointments.

The decision, which will be announced on Tuesday morning, is a blow for Rahman, who was re-elected as mayor in 2022 after serving a five-year ban from high office for corrupt practices. The announcement will follow the publication of what is expected to be a highly critical report into the financial and personnel management of the council, which was commissioned by the previous government.

The envoy and their assistant will keep a close watch on the decisions made by Rahman and his team, before reporting back to the department. Officials are understood to have referred to this in communication as a “support package” to help the authority make improvements.

Tower Hamlets and the government declined to comment.

The Conservative government appointed inspectors earlier this year to scrutinise the management of the east London borough, after the Local Government Association flagged numerous concerns with how it was being run.

At the time, Rahman said he was “disappointed” with the decision but pledged to “cooperate fully with the process”.

The LGA said in a report: “There is a lack of trust between the mayor’s office and senior officers, with examples of inappropriate questioning and pressure to feed things into the mayor’s office for ‘sign off’.”

It also warned: “There is a large number of agency and interim staff, with vacancies in key positions that need high-quality permanent appointments.”

The government also asked the inspectors to look at “the use of resources for elections and the maintenance of the independence of the returning officer, and the arrangements to bring services such as Tower Hamlets Homes and leisure services in house”.

Officials warned at the time there was a danger of “replicating” the circumstances that led to Rahman being banned from office for five years.

Months after Rahman was re-elected in 2014, the then communities secretary, Eric Pickles, took over the administration of the council after his government department found evidence of a “crony culture” under Rahman.

Pickles told the Commons at the time that Rahman had dispensed public money like a “medieval monarch” and oversaw an administration that was “at best dysfunctional, at worst riddled with cronyism and corruption”. He said grants were distributed without rationale, clear objectives, monitoring or transparency.

Rahman was removed from office in 2015 and banned for five years from standing for mayor after an election commissioner found him guilty of election fraud. He was also found in a civil finding personally guilty of corrupt and illegal practices.

The mayor and his supporters were found to have used religious intimidation through local imams and vote-rigging, as well as falsely branding his Labour rival a racist to gain power.

In 2020, he returned to local politics through Aspire, a new party that included some of his old political allies. In 2022, he stood as a candidate in the mayoral election in Tower Hamlets and won in the second round with 54.9%. A year later he re-appointed Steve Halsey, one of his most senior officials from his last time in office, as the authority’s chief executive.

Aspire recently lost its majority after several councillors resigned from the party.