Funding for a controversial grant scheme in Pembroke and Pembroke Dock - part of which is the subject of a police investigation - has been suspended.
The Welsh Government has confirmed that EU funding for the Pembroke and Pembroke Dock Commercial Property Grant Scheme has been put on hold.
A Welsh government spokesman said: "As a precautionary measure, WEFO (the Wales European Funding Office) has temporarily suspended EU funds payments to Pembrokeshire council in respect of its Commercial Property Grant Scheme while the council's review of eligibility of expenditure is under way."
Dyfed-Powys Police has previously confirmed that allegations of fraud relating to part of the scheme are being investigated.
Pembrokeshire County Council had referred the matter to the police after concerns from councillors.
The matter is due to be discussed by the council cabinet on Monday, although the item is likely to be heard in private.