The scandal over Boris Johnson’s friendship with technology entrepreneur Jennifer Arcuri was reignited on Saturday after the Observer revealed that the independent police watchdog has delayed its announcement on whether the PM should face an investigation into possible criminal misconduct until after the election.

The decision prompted fury from Westminster politicians and London assembly members who said it appeared that a ruling had been “suppressed” in order to protect Johnson from potentially damaging headlines at a crucial stage of the election campaign.

In a private meeting held before parliament was dissolved last week, the Independent Office for Police Conduct (IOPC) officials agreed not to announce whether they were going to investigate “possible criminality” over allegations about a conflict of interest in Johnson’s dealings while mayor of London with US businesswoman Jennifer Arcuri until after the election.

Sources close to the IOPC investigation said the watchdog was on the verge of announcing its decision on whether it was proceeding with a criminal investigation.

The IOPC was tasked by the Greater London Authority with assessing whether criminal charges should be brought because of the then-mayor’s responsibility for London’s policing.

It is alleged Arcuri received favourable treatment due to her friendship with Johnson, including receiving large sums of public money for her technology firms.

The offence of misconduct in public office carries a maximum term of life imprisonment. Johnson has denied any impropriety.

Facebook Twitter Pinterest Jennifer Arcuri. Photograph: Rex

Jon Trickett, shadow Cabinet Office minister, said: “This is incredible. It’s a suppression of information which the public is entitled to have. Given the fact we’re in a general election there should be maximum transparency.” He added. “This decision must be reversed immediately.”

Caroline Pidgeon, a Lib Dem member of the London assembly’s oversight committee, said the delay raised the possibility of Downing Street contact with the IOPC before its decision. “It raises questions over how independent the IOPC really is and whether the prime minister’s lawyers have been exerting undue pressure,” she said.

The news follows a chaotic week for Johnson, the government and the Conservative party. A cabinet minister, Alun Cairns, was forced to resign, and the leader of the Commons, Jacob Rees-Mogg, was heavily criticised for suggesting victims of the Grenfell Tower fire had lacked “common sense” for not defying advice of the fire services and fleeing the building.

Saturday’s latest Opinium poll for the Observer suggests the Tories’ rocky campaign start could already be doing damage to the party’s election prospects. Its lead over Labour has been cut by four points from 16 to 12 over the past week.

When the prime minister was referred to the IOPC on 27 September, government sources described the move as “politically motivated”.

Instead of announcing its decision on the investigation last week, the IOPC decided to cite election “purdah” – the pre-election period during which restrictions are imposed on policy announcements and use of public resources – as a reason for deferring the announcement until after the 12 December poll.

Critics point out that if the IOPC’s decision had been not to investigate there would be no problem announcing that before purdah began.

Trickett said: “There can be no possible excuse for purdah in this case.”

Pidgeon added: “An independent agency shouldn’t be hiding behind purdah rules that may not even apply to it. This is absolutely in the public interest.”

Tom Copley, a Labour member of the assembly oversight committee, which has launched its own inquiry into allegations related to Johnson’s relationship with Arcuri, said: “If it is true that the IOPC is hiding behind purdah rules, then that would be outrageous. The IOPC must do their job without fear or favour regardless of whether we happen to be having an election.”

The IOPC says it places great emphasis on being “entirely independent of the government”. Its website adds: “As a totally independent body, not part of the police or government, we investigate and make decisions on serious and sensitive cases.”

When asked, a Cabinet Office spokeswoman said she was “unable to confirm” if purdah rules applied to the IOPC. In the Cabinet Office’s special guidance for the 2019 general election, released last Monday, there is no reference to the IOPC. Similarly, the updated Commons briefing paper on purdah, published last Tuesday, has no reference to the watchdog.

Purdah applies to non-departmental public bodies and other arms’ length bodies but the official list of 407 agencies and other public bodies does not name the IOPC.

An IOPC spokesman admitted he was “not entirely sure” whether purdah rules applied to the organisation but because of the case’s significance it may receive Cabinet Office guidance to be “on the safe side” although they did not believe that had occurred.

“The assessment is still ongoing as far as I’m aware, nothing is imminent that’s for sure,” he said.

Despite the postponement of the decision it is understood the investigation is ongoing, although it remains limited to a “scoping exercise”.

An IOPC spokesperson said: “The IOPC strongly refutes claims published in the Observer. This matter has not been finalised. We have not delayed any announcements on the status of this referral. Our assessment of this matter is ongoing as we continue to collect information and seek legal advice.” She said the IOPC had not been ‘tasked’ by the GLA but that the monitoring officer was required by law to make the referral.

The IOPC’s involvement meant that an earlier, separate, misconduct inquiry into Johnson’s relationship with Arcuri had to be paused. On 16 October it asked for a postponement of the London assembly’s inquiry while it was “acquiring material … to determine whether it is necessary for this matter to be criminally investigated”.

It has also emerged that London assembly members were told that the IOPC investigation would be “done and dusted” by the end of this month.

Among the allegations being investigated by the IOPC are questions over a payment of £126,000 of public money to Arcuri’s businesses and why she was on three overseas trade missions with Johnson, despite not qualifying as a delegate.

• The headline was amended on 11 November 2019 to clarify that the inquiry referred to would be conducted by the police watchdog, the IOPC, not the police.