The business dealings of Conservative Party deputy chairman Lord (Michael) Ashcroft are under renewed scrutiny today after the Independent newspaper reported the Tory peer directly helped to fund the lifestyle and property aspirations of the disgraced former Turks and Caicos premier, Michael Misick.

It has long been suggested that Ashcroft helped to build Misick a palatial beachfront mansion in exchange, it is alleged, for awarding contracts to build two state-of-the-art hospital complexes on the struggling UK dependency to a company indirectly linked to Ashcroft.

Now the Independent claims Lord Ashcroft's British Caribbean Bank (BCB), which is run locally by his son Andrew, advanced a $5m (£3m) loan to Misick, who was forced to resign in April after a UK royal commission found evidence of a culture of "political amorality" on the islands. The constitution suspended, the islands are now under FCO administration.

Ashcroft, nicknamed ‘Cashcroft’ in Westminster circles for his £10m donations to the Tory party over recent years, was last month accused by the Prime Minister of Belize, Dean Barrow, of monopoly practices relating to the Central American nation's telecom service and of acting in the manner of a colonial overlord.

But Ashcroft's dealings in Turks and Caicos have remained obscure. He is a ‘Belonger’, or naturalised citizen of the islands, and his bank apparently underwrote more a third of a billion dollars in development funds during Misick's rule – though neither Ashcroft nor his businesses have been accused by the royal commission of any wrongdoing.

Yesterday, Shaun Malcolm, former chairman of the PDM opposition party, wrote to the Conservative leader David Cameron to seek assurances that Lord Ashcroft will not be in a position to influence the government of the islands if the Tories win the next election.

It is understood that Ashcroft, who recently accompanied a shadow government delegation to high-level meetings in Washington, and his son Andrew, who runs the island's Nikki Beach nightclub and resort, have organised several visits to the islands for members of the shadow cabinet. One of those invited in 2007 was the shadow foreign secretary, William Hague.

Malcolm wrote in his letter to Cameron: "Due to his willingness to contribute to both political parties, as well as the small size of our population and economy (only 30,000 citizens and residents), Lord Ashcroft's wealth, and his willingness to use it, has and does give him a level of influence that we feel puts any hope of democracy here at risk."

According to the Independent, Misick build his mansion on land he bought from Lord Ashcroft's company Leeward, negotiating with the head of the peer's former construction company, Johnston International. Misick received a $5m loan from BCB in spring 2007 as he was building his mansion, on top of a $4.7m loan from a company he said was associated with Johnston which he used to pay for the construction.

When questioned over the precise relationships of the companies and individuals involved in the deal, Misick demurred.

"You are premier of this overseas territory. Did you not wish to know who it was you were doing business with?” pressed QC Alex Milne.

Misick’s former wife, LisaRaye McCoy, was more forthcoming, saying Ashcroft would "make provision" for the former premier at the bank. "He has been to the house several times and we have been out to eat and we have met at Nikki Beach," she said.

There are growing concerns on the islands that if the Conservatives win the next election, Ashcroft would be awarded the power in Turks and Caicos to force currently abandoned and potentially ecologically disastrous development projects through.

"We respectfully ask for your assurances that you will work with us to make certain that the Turks and Caicos will continue on its path towards good governance without being influenced by your [vice-chairman] should you form the next government in Britain," Shaun Malcom wrote yesterday. He called for "tangible safeguards" to keep Lord Ashcroft away from policy on Turks and Caicos.