Downing Street and the Metropolitan Police have rejected criticism of the decision to review evidence in the disappearance of Madeleine McCann.
David Cameron asked the Met to "bring their expertise" to the case, after a request by Madeleine's parents.
Met Police Authority member Lord Harris said Mr Cameron's move undermined the independence of the police.
But Downing Street and Scotland Yard have both denied the government ordered the force to investigate.
Madeleine went missing aged three on holiday in Portugal in May 2007.
Labour peer Lord Harris said Mr Cameron's action "drives a coach and horses through the draft protocol issued by the Home Office designed to preserve the operational independence of the police."
Writing in his blog, Lord Harris said that while it was desirable to find out what had happened to Madeleine McCann, he did not think senior leadership at the Met would be happy.
"It again embroils their officers in a high-profile investigation, where the chances of success are unclear, and which will divert limited investigative resources away from other matters."
A Downing Street spokesman said the prime minister and Home Secretary Theresa May asked the Met to get involved because the case was "exceptional".
Mrs May, whose department will pay for the review, said it was hoped the force "can bring a new perspective to the case".
Speaking in Dublin on Friday evening Madeleine's father Gerry McCann welcomed the government's involvement, calling it a "positive step".
"The Met has excellent expertise in reviewing major crimes so we are very pleased and we'd like to thank David Cameron for his intervention", he said.
He added: "We were told that no-one would look at it because it's a Portuguese investigation so I'm glad to see the government has taken a more pro-active role."
Lord Bradshaw, a Liberal Democrat peer and vice-chairman of Thames Valley Police Authority, described Mr Cameron's intervention as a "PR exercise" and said it compromised police independence.
"What appears on the face of it to be fairly innocuous orders, it's a fairly short step from there to telling the police they have got to investigate this rather than that."
Scotland Yard denied that it had been ordered to investigate.
It said Commissioner Sir Paul Stephenson "received a request, which he considered, and took the decision that on balance it was the right thing to do".
A Downing Street spokesman also denied police had been directed on an operational matter: "It was done at the request of the Home Secretary. It was agreed by Sir Paul Stephenson. That is not a direction."
The official Portuguese inquiry into Madeleine's disappearance ended in July 2008 although private detectives hired by the McCanns have continued the search.
In an open letter in the Sun on Thursday, Madeleine's parents had asked Mr Cameron to launch an "independent, transparent and comprehensive" review of all information relating to the disappearance of their daughter.
In his reply, published by the same newspaper on Friday, Mr Cameron said their ordeal was "every parent's worst nightmare".
He wrote: "I simply cannot imagine the pain you must have experienced over these four agonising years, and the strength and determination you have shown throughout is remarkable."