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Caerphilly council has suspended its chief executive while an investigation takes place into the way he was awarded a controversial £25,400 pay rise.

Gwent Police were called in after a critical Wales Audit Office report said the council had acted unlawfully in awarding Anthony O'Sullivan a pay rise.

The matter was then referred to Avon and Somerset Police.

The council said Mr O'Sullivan recognised that his presence at work "would not be appropriate".

Mr O'Sullivan's pay grade was initially increased from £127,653 to £153,071 at a council meeting to set senior officers pay.

The meeting last September was not advertised and there was also no adequate record of it because it was brief.

A spokesman for the authority said: "The Wales Audit Office has recently published a public interest report which requires investigation.

'Unlawful'

"In the circumstances the chief executive has recognised the difficulty that this creates in terms of him fulfilling his responsibilities as head of paid service, and that his continued attendance at work during this period would not be appropriate.

"He has agreed, following discussions with the leader, to be suspended from his duties pending the outcome of these investigations."

Mr O'Sullivan's pay increase was later cut to £5,000.

On Wednesday, Avon and Somerset Police confirmed that they had been asked by Gwent Police to look at the Wales Audit Office findings on Caerphilly council.

It emerged hours after the release of the audit office report which said the council's actions over the chief executive's pay had been "unlawful on a number of grounds".

Three-year pay freeze

As well as the police inquiry, a Welsh government minister will assess what action Caerphilly will now take. The council is also considering the report.

Trade union Unison supported the audit office findings and called for a review of all chief officers' pay in the public sector.

The initial increase in Mr O'Sullivan's pay grade led to protests by staff and trade unions, and an apology by Labour councillors on the authority.

Caerphilly is planning to make cuts of more than £5m this year while staff are on a three-year pay freeze.

The council reversed the decision in January and cut Mr O'Sullivan's £25,400 pay rise to £5,000. As a result, the audit office said it had decided not to seek a court ruling.

However, it said there were lessons for Caerphilly to learn and recommended a review of its procedure for advertising meetings.

The authority blamed the failure to advertise the meeting on human error.