In a short statement, the company said: “Merlin Biosciences wishes to confirm that it is working with the SFO in a preliminary inquiry concerning an investment made by one of its funds.

“Other than to say that Merlin is providing its full co-operation and support to the SFO, it would be inappropriate to comment further at this time.”

News of the inquiry, first revealed by The Times on Saturday, will come as a blow to Tony Blair, who has lauded Sir Christopher as one of Britain’s most successful entrepreneurs. The Prime Minister recently gave his backing to Sir Christopher, a Labour Party donor, in a new venture aimed at encouraging stem cell science.

It was not clear yesterday which of Merlin’s investments are under scrutiny. The company has invested in more than 40 biotech businesses across three venture capital funds.

Sir Christopher, chairman of Merlin, and Mark Clement, chief executive, have also made personal investments in a number of companies, including some of those that are also held by the venture capital funds, through a separate vehicle, Merlin Equity.

In a recent transaction, Merlin Equity sold a portfolio of shares, including a 3.14 per cent stake in Ark Theraputics, to Calivet, a British Virgins Island-registered company, in a private transaction, raising speculation that Merlin’s management was looking to raise cash.

There is no suggestion that the deal, or Calivet, is part of the SFO investigation.

Meanwhile, a spokesman for Merlin confirmed that Mr Clement had resigned from the board of Paradigm Therapeutics.

The company, one of the most promising within Merlin’s portfolio, notified Companies House of the resignation on August 18.

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