The Metropolitan police has been granted a 12-month extension to a pilot project with the spy tech firm Palantir while the force carries out a procurement process.

The development comes weeks after the mayor of London, Sadiq Khan, blocked a £50m deal between the Met and the US company to automate intelligence analysis in criminal investigations.

Last month the mayor’s office said there had been a “clear and serious breach” of procurement rules and said police had seriously considered only one supplier.

Palantir’s lawyers subsequently wrote to the Mayor’s Office for Policing and Crime saying they intended to challenge the decision in court, the Times reported.

The Met will now run a procurement process for the further 12 months to appoint a supplier.

Regarding the force’s use of AI system Customer Service Engine (CSE), Met assistant commissioner Rachel Williams said on Wednesday: “We are pleased Mopac [the Mayor’s Office for Policing and Crime] has approved the Met to continue to use this capability for a further 12 months to strengthen professional standards, root out misconduct and increase public confidence.

“As part of our a New Met for London Plan, we set out a series of commitments to improve standards and tackle poor culture.

“The vast majority of Met officers and staff serve London with dedication and integrity, and they – and the wider public – rightly expect robust action against the small minority who abuse their position or undermine public trust.

“This work has allowed the Met for the first time to bring together data it already lawfully holds in one place to identify potential standards, welfare or cultural concerns.”

Williams added: “A pilot project earlier this year focused on identifying potential conduct issues and a significant number of matters are now being progressed by our professional standards team.

“We will continue to work with Mopac over procurement of technology at pace for the longer-term. This is to support both our work on raising standards and our ambitions to use the technology to streamline administrative processes, close budget gaps and free up officers to police the streets of London.”

A spokesperson for the Mayor of London said: “The deputy mayor has required the Met to run a new procurement process, open to a wide range of potential suppliers, to choose the long-term provider of this capability.

“Recognising the Met’s current needs, the Met may extend the current pilot to retain existing capability while this procurement takes place.”

Scotland Yard appointed Palantir initially on a deal to use artificial intelligence to detect rogue officers by scanning to see how they might be abusing rosters and other systems.

In a speech on Wednesday about the Met’s use of technology, commissioner Mark Rowley spoke about the collaboration with Palantir.

He said: “Today, our ability to act is constrained by a lack of tech to provide such insight.

“To prove this concept, we created a pilot with Palantir, first focused on integrity problems within the Met, bringing data together, surfacing patterns that would previously have gone unnoticed, identifying potential misconduct or risk earlier, and enabling us to act more consistently.

“Through that pilot, we have been able to bring together data on around 45,000 people across the organisation, moving to a discovery-based model.

“We are no longer reliant solely on concerns being raised by colleagues or victims coming forward. We can now proactively identify problem individuals or patterns, spot risks earlier and intervene before harm occurs. It is already proving to be a step change.”

A Palantir spokesperson said: “We’re proud that our software has been used so effectively by the Met police to identify officer misconduct. This decision will enable that important work to continue.

“We know that Londoners value a police force that ensures its officers adhere to the highest standards – and we are determined to help the Met deliver that.”