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A Liverpool contractor has suspended work on two jobs in the city while a police investigation is carried out into the founder of the developer behind them.

Vermont said it had stopped working on a student accommodation scheme called Aura, which is close to Liverpool University. It is around two-thirds complete and due to be  finished in September.

The firm has also suspended operations on the first phase of the 拢250m Infinity scheme, which is made up of three towers near the waterfront. The first phase is a 38-storey, residential tower with 416 apartments scheduled to be handed over in December 2021.

Both schemes are being carried out by local developer Elliot Group, whose founder Elliot Lawless was one of two men arrested on suspicion of fraud.

Lawless, 32, called the allegations 鈥渃ompletely baseless鈥� and has promised to clear his name following his arrest a week before Christmas.

The second man arrested was a 50-year-old employed by Liverpool city council. The council said that it 鈥渄oes not comment on the circumstances of individual members of staff鈥� but it is believed that he is Nick Kavanagh, its director of regeneration and employment.

Both men have been released on conditional bail.

A spokesperson for Elliot Group said: 鈥淲e want to resume all works as quickly as possible and to ensure completion for the purchasers and investors.鈥� Work on the developer鈥檚 other sites remains ongoing.

In a statement, Vermont said that it was 鈥渋n talks with its supply chain to reassure all sub-contractors that payment of all works to date will be met鈥�.

The jobs, which had shut down for the two-week Christmas break, had been due to restart yesterday.

Elliot Group鈥檚 portfolio of schemes includes 20 sites across Manchester, Leeds and Newcastle spanning more than 5,500 homes and over 700 hotel rooms.