British police have arrested the former chairman of the Co-operative bank as part of an investigation into the supply of illegal drugs after a newspaper published a video apparently showing the man arranging to buy crack cocaine and crystal meth.

Prime minister David Cameron has questioned why Paul Flowers, a one-time local Labour politician and Methodist preacher with no banking qualifications, was judged suitable for the role of chairman of the bank.

Police said a 63-year-old man was arrested in the Merseyside area of northern England late yesterday.

“He has been taken to a police station in West Yorkshire where detectives will continue their enquiries,” police said in a statement.

Flowers, 63, has not directly addressed the allegations of drug use, though he said in a statement on Sunday that he has had a difficult year and apologised for doing sometimes stupid things.

He could not be immediately reached for comment today.

Revelations about Mr Flowers’ lifestyle have ratcheted up the pressure on the Co-op which promotes itself as an ethical alternative to the biggest banks and has prompted angry clashes in parliament over why regulators approved his appointment.

“There are clearly a lot of questions that have to be answered,” Mr Cameron told parliament on Wednesday. “Why weren’t alarm bells rung earlier, particularly by those who knew? Why was Reverend Flowers judged suitable to be chairman of a bank?”

The government’s priority is to “safeguard this bank” without using taxpayers’ money, Mr Cameron said.

During Mr Flowers’ tenure as chairman of the bank from 2010 until June this year, the bank racked up huge losses and faced a £1.5 billion capital shortfall. The Co-op Group has since lost its majority stake in the bank to US hedge funds that owned its debt.

Group chairman Len Wardle quit on November 19th for his part in appointing Mr Flowers.

Mr Flowers, who worked in local politics for Labour, approved a donation of £50,000 to the office of its finance spokesman Ed Balls and sat on a business advisory group reporting to its leader, Ed Miliband. Mr Miliband said there were no close links between him and Mr Flowers and that he was confident his party had always acted correctly on the issue.

“He was never my close adviser,” Mr Miliband said in a television interview on Wednesday evening. “What I’m utterly confident about is the Labour party always acts with the utmost integrity, and we did on this occasion too.”