Serial entrepreneur Sir Philip Green has been appointed by the coalition government to lead an external review into government spending.

The founder of Top Shop will have responsibility to examine government spending over the last three years and to identify potential savings before reporting to the cabinet office ahead of a comprehensive spending review this autumn.

The entrepreneur, who has an estimated fortunate of £4bn, will not be paid for his time and no target has been set for the savings. Sir Philip owns more than 2,000 shops in the UK, including the BHS and Topshop chains. His empire is estimated to make up some 12% of the nation's clothing retail market.

A minister for the cabnet office, Francis Muade, said that the government were extremely fortunate to have him on board and praised his "commercial experience and fantastic track record of managing large organisations."

However, business secretary Vince Cable was not consulted over the appointment. There are fears this may casue rifts in the coalition government as Mr Cable is a staunch opponent of tax avoidance and Sir Philip has in the past been associated with sophisticated tax planning arrangements in the UK and offshore to produce tax savings.