The Mayor of London is urging the Commission for Racial Equality to formally investigate Southwark Council over the Elephant and Castle regeneration scheme.
Following a meeting with Southwark Council leader Nick Stanton, Mr Livingstone said: "Southwark Council has failed to address the very real concerns of the African and Caribbean communities who have consistently alleged that they experience racism within the local authority led regeneration process. Lord Ouseley's investigation report and his subsequent press comments, in addition to recent calls from senior members of the black community indicate that Southwark Council has failed to reassure or convince the local black community of its determination to tackle racism.
"In such circumstances and after considering all of the issues involved I have decided to request the Commission for Racial Equality to formally investigate matters relating to the regeneration of the Elephant and Castle area."
A significant number of local traders, especially in the Elephant and Castle shopping centre, have voiced strong concerns about the regeneration process, and say that despite assurances that businesses of all sizes will be accommodated in the regeneration scheme, that without financial and practical support they will struggle to meet the costs of relocation and shopfitting.
Traders have also told the London SE1 website that it is increasingly difficult to trade profitably when the shopping centre is effectively a 'condemned building' and the office building above the centre is now empty, thus drastically reducing weekday daytime trade.
Many businesses in the shopping centre are run by people of black and minority ethnic origin.
Lee Jasper, the mayor's director of equalities and policing, said: "Black traders feel disenfranchised from the regeneration process. Our complaint is not politically motivated."
Nick Stanton refutes the mayor's claims: "The CRE has asked us for more information about progress on the Elephant and Castle. They said they were happy, and there was no need for intervention."
He told The Guardian: "I'm surprised at the mayor's comments. I don't think this is a suitable issue for playing party politics. It is odd that some one who gave us a planning award for the Elephant last year, is now saying he's concerned we are not consulting properly."