"Acting on a proposal by the state prosecutor's office, the national security police is starting criminal proceedings to find out whether or not the actions by Tallinn Deputy Mayor Priit Vilba constitute a crime," said a chief prosecutor's office spokesman.
The criminal proceedings begun were based on media reports, a process that is allowed in Estonia.
The daily newspaper Eesti Paevaleht reported on April 11 that Vilba had violated the corruption law by ordering 400,000 kroons' ($23,000) worth of consultancy services from a company, M.O.B. Konsultatsoonid, which belongs to his son.
The consultancy was needed for the restructuring of municipal services under Vilba.
The newspaper said that the order, allegedly received by Vilba's son's consultancy as a subcontract from a different consultancy, was split into halves to bypass requirements to stage a public procurement tender.
Vilba denied the allegations and said he would sue the newspaper, but as of April 16 no case was filed against Eesti Paevaleht.
The story published in Eesti Paevaleht also mentioned another consultancy, Eke Ariko, that reportedly also advised the city about municipal services.
The head of Eke Ariko, Juri Kuslapuu, said on April 17 that his company had dealt with M.O.B. Konsultatsoonid only once, in business that was not related to the city administration.
"Ariko participated in the creation of the city planning and development department, which began work in January," said Kuslapuu.
"We think the article published in Eesti Paevaleht was based on unchecked information," said Urmas Toome, a board member of M.O.B. Konsultatsioonid.
Tallinn Mayor Juri Mois stated on April 11 that he is going to make a proposal to the City Council to dismiss Vilba, unless the Reform Party itself replaces the deputy mayor. The city mayor has demanded Vilba's resignation over a failed plan to introduce a new, highly expensive public transport ticket system in the capital.
Mois said Vilba should quit, because the introduction of the electronic ticket system, which was Vilba's responsibility, was not completed.
Mois said he had talked twice over the last month with City Council Chairman Rein Voog, who is a member of the Reform Party, about Vilba's possible replacement.
"To this Voog has said that Vilba's replacement will come under discussion only if Pro Patria Union Deputy Mayor Heiki Kivimaa loses his post too," Mois told reporters on April 11.
Voog, meanwhile, told Baltic News Service that the Reform Party had never discussed Vilba's possible replacement.
The Reform Party and the Pro Patria Union, two parties in the trio that makes up the national government coalition and the core of the coalition governing the capital Tallinn, met on April 11 to sort out differences that are threatening the stability of their alliance. But the politicians agreed to continue working together in the coalition and the city government without making any changes.
"We eased the tensions and found that the problems which have recently occurred can be solved," said Urmas Paet, the head of the Reform Party's Tallinn division.
Paet confirmed that the opposition Center Party will not be made a part of the municipal coalition, which consists of the Pro Patria Union, the Reform Party, the Moderates and Russian politicians.
Mois declined to comment after the meeting of coalition partners, which ended shortly before midnight.
Commenting on the possible dismissal of Vilba, whose replacement has been sought by the mayor, Paet said Vilba will continue in his present office although his suitability for the job will certainly be taken under consideration.
Vilba began his political career in 1996 and has been deputy mayor since 1999.