THE main operator of speed and red light cameras in NSW has been dealt a blow after it was declared unfit to bid for contracts in Chicago on corruption grounds.

Redflex, which operates mobile speed cameras in NSW and is in a prime position to snare a piece of the O'Farrell government's huge speed camera expansion, has been embroiled in a scandal in the US over payments made to Chicago city officials.

Probe ... camera firm Redflex has been embroiled in a corruption scandal in the US. Credit:Michael Clayton Jones

The damage deepened over the weekend when the Chicago mayor, Rahm Emanuel, said he would not allow the company to bid for a new red light camera program after fresh allegations emerged it had misled his city.

Shares in Redflex were in a trading halt last week, but fell 24 per cent on Monday.