The lord chancellor is to be represented at tomorrow’s appeal challenging a Crown court judge’s decision to throw out a major fraud trial for want of defence counsel, the Gazette has learned.

At the last minute, Chris Grayling has sought, and been granted, leave to be represented as an interested party in R v Crawley and Others, a case arising out of the Operation Cotton investigation.

He will be represented by joint head of chambers at Blackstone Chambers Anthony Peto QC and Peter Woodall, who joined the Public Defender Service last month from Carmelite Chambers. Alex Cameron QC will oppose the application. 

At Southwark Crown Court earlier this month, His Honour Judge Anthony Leonard stayed the prosecution against five defendants in relation to an alleged £4.5m land banking fraud. The five defendants were represented pro bono by Cameron, head of chambers at 3 Raymond Buildings, and the prime minister's brother. 

Following the refusal by barristers to accept the most serious criminal cases after the government cut fees by 30% (barristers claim the sum is 44%), no advocates could be found to take the case.

A Ministry of Justice spokesman told the Gazette the Financial Conduct Authority, which brought the prosecution – its first since it was established in April 2013 – has made a request for Grayling to be involved in the appeal.

He said: ‘Following a request from the Financial Conduct Authority, the MoJ will be making representations at the appeal hearing to ensure the fullest possible information is before the court in reaching a decision.’ 

He would not comment further on the case, but said: ‘It is important to ensure that justice is properly served.’

A spokesman for the FCA confirmed the request, but would not comment on why it had been made.

Phil Smith, partner at Tuckers, which represents one of the defendants, said: ‘It’s a very late move for him [Grayling] to get involved. What precise series of events has lead to it and at whose behest one can only speculate on.’

He added: ‘Because of the funding issue, I’m not surprised he is involved. In this case I wouldn’t rule anything out – expect the unexpected.’

The appeal outcome could have serious consequences for other major fraud trials.

At least seven major trials, including an investigation into the alleged manipulation of Libor rates and the FCA’s largest and most complex investigation into insider-trading, Operation Tabernula, could be in jeopardy.

Tomorrow’s case will be heard in Court 4 at 10.30am by Sir Brian Leveson with Lords Justice Treacy and Davis.