Scotland's biggest council is being sued over its controversial privatisation of IT.

Amid a storm of protest from unions, Glasgow's former Labour administration last year handed over control of everything from school records to the sex offenders' register to a Canadian firm, CGI.

Now the new SNP minority city government is facing legal action from a potential rival bidder which claims the deal should have been put out to a competitive tender.

Ironically, Nationalist and Green councillors had opposed the Labour move but will now have to defend the action, from Serco, which used to run IT services in Glasgow as part of a joint venture with the local authority.

Liz Benison, Chief Executive of Serco’s UK & Europe Local and Regional Government division, said: "We have consistently said that we believe a decision to directly award the contract to CGI without an open competitive process would be illegal under Scots law.

"Despite six months of attempted engagement with council officers, we were not given any convincing legal justification for the direct award, leaving us with no choice but to legally challenge the decision.

"“By refusing to hold an open and fair competition, the previous administration failed to ensure they were getting the best IT service and the best value for money for Glasgow’s taxpayers. We would urge the new administration to reconsider the decision and hold a competitive process in which Glasgow residents can have confidence."

The council has argued that it did not need to enter a formal competitive process because 48 other public sector bodies, including Edinburgh council and parts of the Scottish Government, had already done so. While the SNP in Glasgow opposed the CGI deal, the same party signed it in Edinburgh. However, Serco does not believe that the Edinburgh deal amounts to a framework agreement that Glasgow could piggyback on to. It also alleges that Glasgow's contract is so much bigger that the smaller Edinburgh template should not have applied. Serco suggests the deal is worth £800m, twice a figure usually cited.

A Glasgow council spokesman said: “We have received a challenge to the contract from Serco, which is being assessed. Challenges to procurement are not uncommon.”

The old Serco joint venture, called Access, comes to the end of a 10-year contract at the end of March. Unions only called off a strike in January after a deal was struck on their transfer to the privatised business.

However, the Serco legal challenge does not come as a surprise. The council in February announced it had "temporarily paused work with CGI on the potential future delivery of IT services, after Serco plc informed the authority it would seek to take legal action to prevent it from pursuing a contract with CGI".

Serco's move throws the council's plans into chaos and would have major financial consequences if it were successful at the courts. Glasgow's plan had been to begin the transition to CGI from in April, a year ahead of the end of the Access contract - but that timetable has been thrown into disarray.

Back in February, a council spokesman said: "The council is surprised by Serco's approach, given that it has not challenged this contract in the past - despite being closely involved in the initial bidding process in Edinburgh.

"However, it would be remiss of the council not to treat this matter seriously and take the appropriate time to explore the legal challenge threatened by Serco.

"The current project will be paused in order to -protect the integrity of the procurement process."