GWENT Police authority could face a £2m lawsuit following allegations that a contract they had with a vehicle recovery company was "flawed".

Gwent Recovery group represents seven local businesses who claim they lost money because Walls Truck Services was awarded the contract to carry out vehicle recovery in the area.

They say they are planning to sue the police authority for at least £2m.

"Suing the police authority is a cast-iron certainty," said Mike Eagles, spokesman for the group, which represents road hauliers in Gwent. We'll be suing them for loss of income from 1994."

It was in that year that the contract for vehicle recovery on behalf of Gwent Police was awarded to Walls Truck Services.

After complaints of overcharging, from the action group and from members of the public, and at the request of the Gwent Police Authority, the District Auditor, Paul Griffiths, conducted an investigation. This is now on hold.

Mr Griffiths explained: "My preliminary view at this stage is that the letting of the contract was flawed and the management of the contract seriously deficient.

"While the investigation is not yet complete, due to the serious nature of the issues arising, the preliminary findings have been referred to Gwent Police force.

"In response to the concerns raised, the force has instigated a criminal investigation into a number of issues relating to the contract. In order not to risk compromising the police investigation, I have decided to suspend my own investigation."

The criminal investigation was criticised by politicians of all major parties who called for an outside force to do the investigation.

But Chief Constable Keith Turner said: "This is not about Gwent Police investigating Gwent Police," and said there was "not a whiff of suspicion" from any of his officers.

A spokeswoman for Gwent Police said no writs had been received from the Gwent Recovery Group.