The director of a special needs support group ditched by Ealing Council says officers deliberately withheld cash to force the organisation into financial difficulty.
Borough-based Intuition Parent Partnership was dropped last week after the council decided to switch funding to ContinYou, which is based in Tower Hamlets.
Concerns over Intuition's finances were cited as part of the reason it was not among the seven firms invited to tender for this year's contract.
But director Barbara Quartey claims the only financial problems faced by Intuition were caused by the council withholding salaries and other payments for up to four months, with debts at one point topping £100,000.
In a letter to the Gazette, she said: "We appreciate that the council has a duty to ensure that public money is protected and used efficiently but we do not expect underhand practices from officers who we believe have deliberately sought to try to destabilise the company."
An Ealing Council spokeswoman said: "We followed a full and thorough tender process.
"We believe we have acted fairly and properly in all our dealings with the company.
"We are shocked by the content of Barbara Quartey's letter and frankly the allegations contained in it are unfair.
"Some payments were withheld, but this was because of numerous issues with invoices submitted by the company that had to be examined.
"If the company has any legitimate concerns we will investigate them."