The Mansion House dinner, one of the City of London’s most important annual events, has been thrown into flux by the Conservative Party leadership contest as civil servants deliberate over whether the new chancellor, Nadhim Zahawi, should be permitted to speak at it.

Sky News has learnt that Tom Scholar, the Treasury’s permanent secretary, is in discussions with Cabinet Office officials about whether Mr Zahawi would have an unfair advantage by speaking at the dinner if he remains in the race by next Tuesday.

The Mansion House dinner, to which hundreds of senior financiers, business leaders and government officials are invited, is one of the City’s key showpiece events.

The chancellor, governor of the Bank of England and Lord Mayor of the City of London traditionally make keynote addresses, and usually make significant policy announcements.

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City sources said on Wednesday that if Mr Zahawi was eliminated from the contest by the end of this week, the dinner was likely to proceed as envisaged.

However, if he remains in contention to become the next Tory leader and prime minister, there is growing doubt about whether it would go ahead – at least with him present.

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One option would be for the event to take place with speeches from Andrew Bailey, the Bank of England governor, and Vincent Keaveny, the lord mayor.

Mr Zahawi’s meteoric rise to the second most important job in the Cabinet was confirmed last week when he replaced Rishi Sunak, one of his rivals for the party leadership.

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Within hours, he had joined the chorus of ministers publicly calling on Boris Johnson to step down, and soon after the PM’s departure was confirmed, he declared his interest in running to be leader.

The chancellor is one of few frontbench politicians with a business background, having made a substantial fortune from his role as the founder of YouGov, the polling firm.

He became an MP in 2010, and held a number of advisory and junior ministerial roles before being appointed as the vaccine deployment minister during the pandemic.

Mr Zahawi was then promoted to become education secretary in September last year.

The Treasury, Bank of England and City of London Corporation all declined to comment, while the Cabinet Office has been contacted for comment.

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