The speaker of the City Council, Christine Quinn, is being dealt another political blow by the announcement that one of her likely mayoral opponents, Comptroller William Thompson Jr., is partnering with the Bloomberg administration to give his office a larger role in reviewing contracts funded at the discretion of the City Council.

Deputy Mayor Edward Skyler wrote in a letter to Mr. Thompson yesterday that he and Mayor Bloomberg “look forward to continuing to work with you to strengthen the existing safeguards against corruption, misuse of taxpayer funds and conflicts on interest.”

Ms. Quinn has cultivated a close and supportive working relationship with the popular mayor, who called her the “most honest person I know” after it was first disclosed that the council stashed millions of dollars of the budget behind fictitious groups to create a slush fund that could be doled out later in the year. The U.S. attorney’s office and the Department of Investigation are investigating the practice.

Mr. Thompson wrote in a letter to Mr. Skyler that the new budget oversight practices, which include having his office review all payments of $5,000 or more to various community groups from the City Council, are necessary to “ensure the appropriate use of taxpayer dollars.”

He also wrote that his office is blocking payment to 100 groups that were allocated money in this year’s budget until the Department of Investigation has reviewed the contracts.

Ms. Quinn is facing trouble with her members, who say they are outraged by a series of proposed changes to the way the council allocates money to community groups selected by individual council members, arguing that they would shift the little authority over the budget that the council wields to the mayor.

Yesterday, council members and staff met behind closed doors to discuss budget process changes, and it appeared Ms. Quinn may be backing away from her previously announced plans. A council member who attended the meeting, John Liu, said no one mentioned Ms. Quinn’s proposed changes, not even the speaker herself.

“It’s a difficult situation that the council is in right now and it’s up to the speaker to get the council in the clear,” he said.

A spokeswoman for Ms. Quinn, Maria Alvarado, said the meeting was about broad changes to the budget process, but said the speaker’s proposed changes were discussed.

“She is in the process of taking in new ideas about the best way to implement the reforms and hear new ideas,” Ms. Alvarado said.