Lawson, Lucas, Mendelsohn, the company embroiled in the political lobbying row, is expected to be sacked from its £100,000 a year contract by the Audit Commission next week.
The Audit Commission confirmed yesterday its governing body would be discussing the termination of the contract next week after officials were furious about claims by Mr Ben Lucas, one of LLM's directors, that he had given them privileged information about a government announcement.
A spokesman also confirmed that Mr Lucas had been summoned by Mr Andrew Foster, controller of the Audit Commission, the day after he appeared on the BBC Newsnight programme.
Sources say Mr Lucas was "carpeted " by Mr Foster for his comments given to Newsnight and to the Observer newspaper during a taped conversation with Greg Palast, an Observer journalist.
Mr Lucas told the TV programme he had passed the Audit Commission information about a Treasury announcement from the Chancellor, Mr Gordon Brown, setting up a new housing inspectorate. He claimed the advance information enabled the Audit Commission to bid for the work and help expand its business.
The spokesman said: "The only surprise information they provided was on the timing of the announcement. They told us three hours before the announcement was due to be made."
Mr Lucas was not available for comment. His fellow partner, Mr Neal Lawson, told the Guardian: "I don't want to discuss this with you. Clients are always moving accounts."