Mayor Rudolph Giuliani on Friday vetoed a bill that would have created the first permanent independent agency to monitor corruption in the Police Department. He said that under the City Council's bill, the panel would have had too much investigative power and might interfere with other law-enforcement agencies.

The bill has been championed by Speaker Peter F. Vallone, and the veto by the mayor represents the newest source of tension in the increasingly stormy relationship between the council and Giuliani.Council leaders say the veto will almost certainly be overridden. It is the fifth veto since Giuliani took office in January and comes just weeks after the council took the mayor to court in a bitter dispute over the city's budget.

Giuliani has long maintained that he favors some sort of agency to monitor police corruption. But he has strongly criticized the Council bill - which gives the panel subpoena power and its own investigators - saying that it would create nearly unfettered investigative power that could easily clash with the work of the city's five district attorneys and other agencies.

Giuliani said he vetoed the bill because it "contains serious legal flaws and also creates a substantial risk of disrupting the efforts of other agencies engaged in investigating and prosecuting police corruption."

Giuliani also argued Friday that the council's plan was an infringement on the powers of the mayor.

The veto comes after weeks of efforts between the council and the Giuliani administration to devise a plan that would be more palatable to the mayor.

Establishment of an independent agency to monitor the police was the central recommendation of a report, released in July, by a commission that had investigated police corruption for two years.

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