A meeting in which Carillion was to be named preferred bidder on a large-scale contract with Bradford council has been put on hold while the authority investigates accusations of foul play.

Bradford council posted a notice on its website last week that said it would be recommending that Carillion be awarded a 20-year contract to modernise its estate and provide it with facilities management.

This was the stage before Carillion was to be named preferred bidder, at which point neither side usually comments. Carillion had been on a shortlist of two with property company Mapeley.

Bradford council then made a second statement to say that the process had been halted because it had received an anonymous letter, “outlining concerns about the procurement process used”.

It continued: “Although anonymous, these concerns must be investigated before members can consider the next stage in the procurement process.”

A meeting planned for Tuesday was cancelled as a result of the investigation and a spokesperson said: “Everything is on hold for now.” The council was originally hoping to reach financial close on the contract in the summer of 2006.

A spokesperson for Carillion said: “We have not received any official notice of being selected preferred bidder and we cannot comment on the investigation because we have not been made aware of what that investigation is.”

If it goes ahead, the contract will involve improving public buildings including libraries, theatres, the city hall and leisure facilities. The council was aiming to earn up to £40m from the sale of surplus land and buildings.