Sadiq Khan has blocked a £50million deal between the Met Police and an AI software firm.
The Mayor of London argued that the deal with the US tech company Palantir was a "clear and serious breach" of procurement rules.
Scotland Yard was accused of negotiating with only one supplier, with no evidence of "demonstrated value for money".
The agreement was designed to automate intelligence analysis in criminal investigations and would have marked the largest ever contract in British policing.
Any potential deals must go through the Mayor’s Office for Policing and Crime.
It is understood that the blocking will not affect a future deal with the US firm.
The company have more than £600million in contracts with the NHS, the Ministry of Defence, the Financial Conduct Authority, and other police forces across Britain.
Tech billionaire Peter Thiel, who has been an outspoken supporter of Donald Trump and serves in both the Israeli military and Ice, co-founded the firm.
Sadiq Khan has blocked a £50million deal between the Met Police and an AI software firm
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Sir Keir Starmer has previously visited Palantir’s showroom in Washington DC.
The mayor’s spokesman told the Guardian that Mr Khan believes Londoners only wanted to see public money being paid to companies that “share the values of our city”.
He added that the mayor will challenge a rule that bars ethics from being taken into account in public procurement processes.
Sir Sadiq has been in a decade-long feud with President Trump, calling his policies "divisive and dangerous".
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The deputy mayor for policing and crime, Kaya Comer-Schwartz, wrote a letter to the Met commissioner, Mark Rowley
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In a letter to the Met commissioner, Mark Rowley, the Deputy Mayor for Policing and Crime, Kaya Comer-Schwartz, said: "I have not been provided with any acceptable explanation for this failure, which I regard as a clear and serious breach of the applicable procedural requirements."
She added that the process had created "legal and reputation risks" to both the Metropolitan Police and Mr Khan.
Ms Comer-Schwartz emphasised that the contract was at the higher end of the £15million-£25million a year budgeted by the force for the contract.
Last month, Scotland Yard praised a trial to flag corrupt and failing officers in the force, claiming it resulted in hundreds of officers being investigated for misdemeanours.
Scotland Yard praised a trial to flag corrupt and failing officers in the force
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The offences included making money by abusing the computerised roster system, falsely claiming to be in the office and failing to declare that they were Freemasons.
Palantir AI, which assists investigations, has also been praised as transformative by other forces across the UK, including the processes evidence on mobile phones.
Mr Khan's blocking of the move also contrasts with Labour's efforts to use AI to improve policing.
GB News has approached the Mayor of London for comment.
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