Nigerian President Umaru Yar'Adua has ordered the suspension of a multi-million dollar contract awarded by his predecessor Olusegun Obasanjo.
Umaru Yar'Adua was hand-picked by Olusegun Obasanjo
The 18bn naira ($145m) contract to build health clinics across the country was awarded to a company believed to be owned by a former aide to Mr Obasanjo.
"It was an illegal contract," Mr Yar'Adua's spokesman told the BBC.
Last month, Mr Yar'Adua reversed the controversial sale of two refineries to a business group linked to Mr Obasanjo.
Nigeria is seen as one of the world's most corrupt countries - an image both Mr Obasanjo and Mr Yar'Adua have pledged to end.
Rule of law
The contract, awarded last year, was to build a primary healthcare centre in each of Nigeria's 774 local council areas.
The contract was funded by compulsory deductions from each of the local councils' share of monthly oil revenue.
Olusegun Obasanjo still runs the ruling party
"There's no law backing it. It was being funded with illegal local government funds," President Yar'Adua's spokesman Olusegun Adeniyi told the BBC News website
This is the second time in less than three weeks that President Yar'Adua would be reversing a major decision taken by his predecessor and political benefactor.
Mr Adeniyi denied that President Yar'Adua was trying to prove his independence from his predecessor, who had been instrumental in his landslide win in last April's presidential polls.
"For President Yar'Adua, everything is about the rule of law and this contract was found to be illegal," Mr Adeniyi said.