LIVERPOOL council was last night urged to launch an investigation into its chief executive, Colin Hilton, over claims he misled politicians in the run-up to the departure of its former finance boss.

Ex-city treasurer Phil Halsall has demanded an independent investigation after Mr Hilton, right, reported him to professional standards body, the Chartered Institute of Public Finance and Accountancy (CIPFA).

The complaint against Mr Halsall, which was dismissed, centred around financial planning and reporting, and also the council’s controversial IT joint venture with BT – Liverpool Direct Limited. Mr Halsall is demanding city solicitors probe whether Mr Hilton acted reasonably because he did not inform city politicians about his concerns about the treasurer’s performance first.

The former £180,000-a-year finance chief has made a number of allegations against Mr Hilton, including that he misled elected councillors in the run-up to his own departure.

He also claims Mr Hilton kept the council’s appointment and disciplinary committee in the dark about the situation, and that the chief executive should have sought its approval before instigating the complaint.

Senior politicians in Liverpool have now been made aware of Mr Halsall’s grievance.

Mr Hilton, who earns more than £200,000 a year, is understood to have made the complaint in June, 2008, the same month the council started the process of restructuring its senior management team which eventually led to Mr Halsall leaving the local authority.

The restructure eventually saw the deletion of Mr Halsall’s post.

He was seconded to the council’s joint venture partner Enterprise Plc for five months before he was given early retirement and a £500,000 pay-off in April, 2009.

CIPFA dismissed the complaint late last year, and it is understood it found Mr Halsall had acted "appropriately and professionally", and that there was no evidence of "unsatisfactory performance".

A spokesman for CIPFA would say only: "CIPFA’s disciplinary proceedings are quasi-judicial in nature and we therefore cannot confirm or deny, for legal reasons, that any particular investigation is under way or has taken place.

"If a CIPFA member is found guilty of misconduct or to have breached professional standards, then these findings are published on our website."

Mr Halsall is currently the head of finance at Lancashire County Council, where he earns £135,000-a-year.

Upon his departure from Liverpool, he received an extra five years’ enhancement on his pension package, worth around £420,000, and a lump sum of £80,000.

In February, 2008, Liverpool was labelled the worst council in the country, and given its infamous one-star rating, for the poor state of its finances, though Mr Halsall always defended his own record.

Mr Halsall was the last member of former chief executive Sir David Henshaw’s inner circle – known to critics as "the cabal" but who always rejected those claims – to leave the council.

The council always insisted the deletion of Mr Halsall’s post was designed to improve performance and give Mr Hilton greater responsibility over financial affairs.

Labour group deputy leader Cllr Paul Brant said: "If a serious allegation is made against the head of finance, it would be normal for this to go through the council's internal procedure.

"Any reference to an outside body would be highly unusual, and councillors would need an explanation for this course of action."

Liberal group leader Cllr Steve Radford said: "Managing performance is part of the remit of senior officers, and one would expect those concerns in the first instance to be raised with the individual members of staff themselves."If any senior manager’s performance is being called into question, that’s what the council’s appointments and disciplinary committee is there for.

"The question is, would this imply there is no confidence in that committee and if so, is it fit for purpose?"

A council spokesman said the authority "did not comment on individual staffing matters," and that "it would be inappropriate" for council leader Cllr Warren Bradley "to publicly comment on a confidential staffing issue."

Last night, Mr Halsall could not be reached for comment about his complaint.