Works to two major projects led by Elliot Lawless' firm Elliot Group have been suspended following his arrest last month .
Along with Liverpool City Council regeneration chief Nick Kavanagh, Mr Lawless was arrested last month on suspicion of fraud .
In December, officers swooped on a plush city centre apartment before confirming a 32-year-old man and a 50-year-old city council worker had been arrested on suspicion of a range of fraud, bribery , corruption and misconduct offences.
On Monday, it was revealed the Elliot Group has agreed with contractors Vermont to suspend work on two projects currently being delivered in Liverpool, but Mr Lawless' firm has stressed that work "remains ongoing" at all other live sites.
The 50-year-old man, Mr Kavanagh, was arrested on suspicion of conspiracy to defraud and misconduct in a public office.
Mr Lawless, one of the city's leading property developers, was arrested on suspicion of conspiracy to defraud, bribery and corruption.
Mr Lawless has since strenuously denied the allegations and neither he nor the council official have been charged with any offence, with both subject to an investigation by Merseyside Police.
In December, the Liverpool Echo revealed the identities of the two men.
According to Elliot Group, the decision to suspend work affects two developments. The first is Aura , a student scheme on the edge of the city’s Knowledge Quarter, which was due to complete in September 2020.
It also involves phase one of the Infinity scheme on Leeds Street - a 38 storey, residential tower with 416 apartments, scheduled to be handed over in December 2021.
Vermont is in talks with its supply chain to reassure all subcontractors that payment of all works to date will be met.
The firm said all of its other projects are unaffected by this decision and all operations continue as normal.
Elliot Group said on Monday it expects to restart activity on both Liverpool schemes following the "satisfactory conclusion of outstanding legal matters".
A spokesman for Elliot Group said: “We want to resume all works as quickly as possible and to ensure completion of the project for the purchasers and investors.”
Vermont said it will not make any further statement while the police investigation is in progress.
