Swansea Council is being sued by the IT firm it brought in to revolutionise its computer systems.
Capgemini, the company asked to deliver the council's £170 million eGovernment project, has submitted a claim against the council.
It is reportedly looking for extra cash because of delays implementing a new payroll system.It is understood the row could result in a "significant financial impact" on council funds.
The two sides are believed to be pointing the finger at one another over the delays.
It is the latest chapter in the controversial scheme, and comes just weeks after the council dismissed the possibility of any penalty charges for dropping the second phase.
Service@Swansea would have seen an all-singing, all-dancing, one-stop shop for council queries set up.
But councillors axed the scheme because of spiralling costs.Instead they are expected to buy a system used by Cardiff Council for less than £1 million - a fraction of the £83 million bill for Service@Swansea
But the new service will not have a call centre with residents having to deal with council staff face to face instead.
The whole Service@Swansea saga has been an embarrassment to council officers who failed to heed warnings given by council staff when they took strike action against the plans in 2004.
Councillor Rene Kinzett, who chairs the council's eGovernment working party, said the exact cost of the claim was not known but insisted promised saving levels had not been achieved.
He said: "We don't know the full story, there are claims and counter-claims."We, as councillors, are stuck in the middle, being kept in the dark. It would be in the several tens of thousands, it would be a significant amount.
"The council is still working with Capgemini to deliver the first phase of the eGovernment project but Councillor Kinzett is concerned about the relationship.
He said: "What is the atmosphere like? What is the working environment like if they are throwing lawsuits at each other?
"And what happened about this being a launchpad for the rest of Wales?"
Capgemini declined to comment on the claim on grounds of client confidentiality.
The project was highlighted in the budget as a financial risk.
A report said: "Delay in implementing new systems has resulted in a claim for additional payments by the contractor.
