Managers at community project eb4u face an investigation into the way they have spent millions of pounds of taxpayers' money in east Brighton.

The decision to request a scrutiny panel was taken by Brighton and Hove City councillors following concerns over how effectively the project was spending its money and over the scheme's ability to meet targets for community improvement.

The panel will consider eb4U's record of project and financial management and its relationship with the council.

And it will make recommendations to help boost the regeneration of east Brighton over the remaining five years of the scheme.

A recent employment tribunal found serious management concerns within eb4U and the tribunal chairman recommended the council "look very seriously" at the project.

An independent 2003 study by a Sheffield University professor of the 39 national New Deal for Communities schemes, of which eb4U is a part, highlighted "teething problems" in many projects.

The motion passed at the policy and resources committee meeting on Wednesday night read: "This council applauds the hard work and commitment of all those involved in eb4U.

"However, this council holds concerns about how effectively parts of this money are being spent and how this could impact on the ability of eb4U to meet the challenging targets for community improvement which have been set."

Last month, council leader Ken Bodfish said holding an inquiry would be a waste of time and money.

He said the project, which is charged with spending £47.2 million on tackling poverty in east Brighton, had already made changes in response to criticisms of its management and employment practices.

He told councillors: "It may well be the case there are some lessons for eb4U to learn about how it monitors aspects of some of its contracts.

"But there is little to be gained from any more time and money being spent looking into the circumstances surrounding the employment tribunal."

But a probe was always likely to go ahead in spite of Labour's initial objections because it enjoyed the support of Conservative, Green and Lib Dem groups on the council.

Even if Coun Bodfish's Labour colleagues had united against holding an inquiry, they would have been outvoted by the other three parties.

At Wednesday's meeting, which asked the overview and scrutiny organisation committee to set up an inquiry at its next meeting on November 15, Coun Sue John said the scrutiny panel's investigation would be an opportunity to look at how eb4U had made its decisions.

But she added it would not be appropriate for the panel to act as a rerun of the earlier employment tribunal.

A spokesman for eb4U said: "The Government Office for the South East is confident that Brighton and Hove City Council, as the accountable body for eb4U, has robust systems in place to identify any problems with funding relating to the NDC programme.

"We can confirm that in the case of eb4U, these systems have been rigorously applied.

"Eb4U has a good track record achieving its targets and we believe it will continue to do so with support from all partners."