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The man in line to replace jailed presidential candidate Luiz Inacio Lula da Silva as the Brazilian Workers' Party standard-bearer on Tuesday denied accusations of corruption.

Prosecutors accuse Fernando Haddad of receiving indirect payments to his 2012 campaign for Sao Paulo mayor.

Construction company UTC Engenharia got preferential treatment on bids after covering about US$1.6 million of debt associated with Haddad's campaign, according to a former accusation filed Monday. Although Haddad did not request payment directly, he had full control over the scheme, according to prosecutors.

On Tuesday, Haddad responded while campaigning in Rio de Janeiro. He said that he cancelled a multimillion dollar project with a company belonging to the UTC group after an employee alerted him that the company was overcharging the government.

"How is it that a mayor who cancels a corrupt construction project gets put through this instead of being thanked for saving the city tens of millions of (Brazilian) reals?" he said.

Haddad is the Workers' Party's candidate for vice president and officials say he'll take the top spot if da Silva is barred from running because of a corruption conviction, as expected.

Haddad said the accusations were meant to destabilize the left-leaning party ahead of October's election. Da Silva, serving a 12-year sentence for corruption and money laundering, leads polls with nearly 40 percent of potential voters.

Haddad's pull with Brazilian voters, however, is much lower. He failed to get re-elected as mayor in 2016, and polls vary widely on how much support he may garner in the case he takes da Silva's spot atop the ticket.