Calvin White, one of the key figures in the "pay-to-play" controversy, has been removed as Chairman of the Public Funds Investment Committee while Government probes the running of public pension funds.

Finance Minister Paula Cox last night said Mr. White had taken a "leave of absence" while the independent review runs its course.

The move comes after revelations that Mr. White organised a fundraising golf day for the PLP and invited 47 US money managers who were potentially vying for Government business or already had it.

Ms Cox said the decision had been made on Friday after a meeting with Mr. White.

In a statement released last night she said: "Neither the Minister nor the Ministry has been loathe to act.

"In conjunction with the Ministry's own initial internal enquiries, I have previously announced that an independent governance review is being commissioned by an independent body.

"Terms of reference of the engagement are currently being endorsed and once confirmed the review will be conducted on a priority basis.

"As Minister I have clearly indicated that this should be as soon as practicable.

"Any issue involving public pension funds is an issue that warrants critical scrutiny and review."

But she said she had no prior knowledge of the allegations - nor had her father Eugene Cox, who was the previous Finance Minister.

"Nevertheless, to ensure there is credibility in the system, a governance review has been commissioned and will be beneficial in charting the way forward."

Last night Opposition leader Grant Gibbons said: "I am pleased the Minister has finally acted on this matter. I believe it is appropriate and a start.

"But it only goes part of the way to restoring some of the credibility of the management of Bermuda's pension funds."

Dr. Gibbons said Mr. White's involvement in questionable activities was sufficient for him to resign completely.

"Pay-to-play activities should have no role in the management of Bermuda's pension funds - they undermine any confidence that investment managers are being selected with the best interests of the pensioners and beneficiaries in mind.

"The revelations we have seen so far suggest that Ms Tina Byles Poitevien was even more involved in pay-to-play activities, particularly in relation to Dr. Brown's fundraising lunch, so she should go as well."

The pay-to-play allegations surfaced after it was revealed that Ms Byles Poitevien, who is Government's pension funds consultant, arranged a "fundraiser" luncheon for Dr. Brown in Washington in 2002.

Guests were asked to pay $2,500 with the money going towards Dr. Brown's personal election campaign fund for the 2003 General Election. It is alleged the guests were all current or potential money managers or stockbrokers of the Bermuda Government pension funds.

Pay-to-play is the practice whereby money managers make campaign contributions to officials or politicians who could later influence the awarding of contracts to manage public money. In 1999 the US Securities and Exchange Commission (SEC) proposed banning the practice but the initiative failed.

Dr. Gibbons questioned who was doing the review, whether it had actually started and when it would be completed.

"Is it likely to be made public? There are also outstanding questions for the Premier," he said.

"Now the Minister of Finance has acted, will the Premier now be addressing this issue of the accountability of his Cabinet colleagues, in particular Dr. Brown and his involvement in unethical activities?

"The question is when will Dr. Brown be returning the money?"