The Serious Fraud Office is dropping an inquiry into its handling of an investigation into former London-listed miner ENRC.
Sir David Calvert-Smith has been asked to abandon his work after being appointed to head the independent inquiry last year, the Sunday Times reported.
The SFO dropped the inquiry after ENRC decided to sue it for £70m.
It claims the court case will cover much the same ground as the inquiry was likely to touch on.
ENRC, which was on the FTSE 100 before de-listing in 2013, has alleged wrongdoing in the case.
It claims investigators have mishandled evidence and privileged information.
It said the investigation has “damaged” its reputation and caused losses.
Last year ENRC claimed victory after the Court of Appeal overturned a High Court decision which forced it to hand over the results of an internal investigation to the SFO.
In 2010 a whistle blower alleged corruption at a Kazakh subsidiary of ENRC.
The SFO launched a criminal investigation into the claims in 2013. Just months later ENRC de-listed from the London Stock Exchange.
The SFO declined to comment. City AM could not reach ENRC for comment.