UK Sport asks British Cycling to investigate kit sales claims
British Cycling has been told to conduct an urgent investigation into allegations official kit - including a high-performance bike - is being sold online for profit.
UK Sport ordered the investigation to "protect our investment in all sports on the world class programme".
It is another blow for British Cycling after Australian Shane Sutton quit as technical director on Wednesday.
He stood down amid accusations of sexism and discrimination.
British Cycling is conducting an internal investigation into the kit allegations - and Sutton was asked to attend a meeting on Tuesday to discuss it.
UK Sport helps fund Britain's Olympians and Paralympians and is investing £30.5m in British Cycling between 2013 and 2017.
It issued a statement, explaining that it would not be "appropriate to speculate or comment further until the investigation is completed".
Sutton, a GB coach since 2002, had already been suspended by British Cycling before deciding to step down.
The 58-year-old is alleged to have used derogatory words like "wobblies" and "gimps" to describe Para-cyclists.
An independent review will also look into claims by cyclist Jess Varnish that Sutton made sexist comments towards her.
She alleges Sutton told her to "go and have a baby" after she failed to qualify in the team sprint for this summer's Olympics.
Sutton "rejects the specific claims" but said the allegations had "become a distraction" and he had stepped down "in the best interests of British Cycling".
He was part of the team that won seven track gold medals at both the 2008 and 2012 Olympics, with British Cycling also claiming 25 gold medals across the past two Paralympics.
There are just 99 days until the start of the Rio Olympics, but British Cycling chief executive Ian Drake has said his organisation is not in crisis.
Programmes director Andy Harrison will take over Sutton's responsibilities as British cyclists look to continue their success in the velodrome and on the road.
Despite leaving his post at British Cycling, Sutton is still employed by Team Sky in a paid "occasional advisory role".
However, after Drake told BBC Sport on Tuesday that Sutton was not paid by Sky as well as British Cycling, the organisation clarified on Wednesday that they were not aware of his Sky retainer and that Sutton had not declared this when he became British Cycling technical director in 2014.
A Team Sky statement said: "Since he stepped down as head coach of Team Sky in January 2013, his occasional involvement as an advisor to Team Sky has been completely separate from his role with British Cycling.
"Any reimbursement for his work with Team Sky has been funded by the team."