Westminster Council denies any wrongdoing
Police have begun an investigation into allegations of fraud against two senior officers at Westminster Council.
The case concerns the awarding of a multimillion-pound parking enforcement contract to private firm NSL Services.
A Met spokesman said: "We can confirm we have received an allegation of fraud. The allegation is being looked at and we are unable to discuss it."
A spokeswoman for Westminster Council in central London said the allegations were unfounded.
European Union law says that contracts worth more than £156,442 must be opened to tender to any interested company and advertised in the EU's official journal.
Westminster's parking contract is worth about £13m a year.
It was previously being carried out by private parking firm NCP.
But in 2007 NCP was sold and broken up into smaller companies.
A new firm, NSL Services, was then created.
It is alleged that at that point the contract was given directly to the new company without going through proper tendering processes.
Parking campaign group No To Bike Parking Tax Campaign provided information to the police that led to the investigation being started.
Chairman Warren Djanogly said: "It was my civic duty to take the evidence collected to the proper authority.
"I have had no other course of action other than to bring this matter to the attention of the police."
Mike More, chief executive of Westminster Council, said: "This allegation is part of an ongoing campaign by a motorbike protest group.
'Co-operating with inquiries'
"We remain confident the parking contract was properly let by our officers and allegations of fraud are completely unfounded."
Mr More said the council would fully co-operate with police inquiries.
A spokesman for NSL Services said the suggestion there was anything wrong in the way the contract was handled was "nonsense".
He added European rules on tendering of public services allowed for contracts to be passed on in this way, as long as the contract had the relevant clause.
"The contract with Westminster does have such a clause," the spokesman said.