Legal challenge halts G4S Wellingborough 'mega prison' contract

G4S gave up running Medway secure training centre (pictured) and Brook House immigration removal centre after undercover filming by the BBC's Panorama

Plans to award a £300m "mega prison" contract to the security company G4S have been halted because of a legal challenge, the BBC understands.

The Ministry of Justice selected the private firm as its preferred bidder to operate the 1,600-inmate jail in July.

Rival bidder MTC has begun a legal challenge against the government. Neither firm would comment.

A ministry spokesman confirmed the action and added it would "continue to work closely with all parties".

Four firms bid to run the all-male prison, which is costing £253m to build and is expected to open next year.

MTC's legal challenge against the contract relates to the commercial process for awarding the contract.

The choice of G4S came as a surprise as it was stripped of its contract to run Birmingham Prison following a damning inspection report which said it was in a "state of crisis".

Days after it won the Wellingborough contract it was ordered to pay £38m in fines and costs for defrauding the Ministry of Justice over an electronic tagging contract.

However, G4S has been praised for its running of four prisons in England and Wales - Altcourse, Oakwood, Parc and Rye Hill.

A Ministry of Justice spokesman said: "We have received a legal challenge relating to the operating contract for the new prison at Wellingborough.

"We continue to work closely with all parties and it would be inappropriate to comment further at this stage."