Cladding used on Grenfell Tower blamed for spreading the blaze is banned in Britain, Philip Hammond said today.
The Chancellor said a criminal investigation into the fatal blaze, in which at least 58 people are feared to have died, will examine whether building regulations were breached when the block was overhauled.
Mr Hammond said the public inquiry set up by the Government following the tragedy would also examine if rules had been broken.
He told BBC One's Andrew Marr Show this morning: "My understanding is the cladding in question, this flammable cladding which is banned in Europe and the US, is also banned here.
"So there are two separate questions. One, are our regulations correct, do they permit the right kind of materials and ban the wrong kind of materials?
"The second question is were they correctly complied with?
"That will be a subject that the inquiry will look at. It will also be a subject that the criminal investigation will be looking at."
But John Cowley, managing director of CEP Architectural Facades, which fabricated the rainscreen panels and windows for Grenfell Tower's cladding sub-contractor Harley Facades Ltd, said: "Reynobond PE is not banned in the UK.
"Current building regulations allow its use in both low-rise and high-rise structures.
"The key question now is whether the overall design of the building's complete exterior was properly tested and subsequently signed off by the relevant authorities including the fire officer, building compliance officer and architect before commencement of the project."
Meanwhile, senior civil servants have been called in to deal with the aftermath of the tragedy amid criticism of the way the crisis has been handled by Kensington and Chelsea council.
Volunteer Nisha Parti claimed survivors are being given just £10 a day to live on by the council and are unable to access the huge donations pledged by members of the public.
She told ITV's Peston on Sunday: "There is money pouring in from all these amazing volunteers, we can't get access to the money and we cannot get it to the families."
Father's Day cards were among the tributes left close to the charred remains of the tower today, while firefighters leaving the scene were greeted by cheers and applause from the local community.
The Mayor of London, Sadiq Khan, attended a local church service to remember those who lost their lives or remain missing, after suggesting high-rise tower blocks dating from the 1960s and 1970s could be torn down in the wake of the deadly fire.
Writing in the Observer, the London mayor said it may well be the "defining outcome of this tragedy that the worst mistakes" of that era become a thing of the past.
Tottenham MP David Lammy called on Prime Minister Theresa May and the Metropolitan Police to immediately seize all relevant Grenfell Tower documents amid concerns among residents of a cover-up.
He said: "We need urgent action now to make sure that all records and documents relating to the refurbishment and management of Grenfell Tower are protected."
Police have appealed to anyone who may have escaped from the building, but has not yet come forward, to make themselves known.