The elections officer for Birmingham was suspended last night after the discovery of a hidden box containing an estimated 1,000 uncounted postal votes from the 2004 local authority elections.
John Owen, the elections officer, and a fellow member of staff, were sent home on full pay pending an inquiry.
Mr Owen is one of the country's leading election experts and has in the past given evidence to the Government about postal vote fraud.
The votes, in sealed envelopes, were found during a raid by the head of the West Midlands fraud squad, the council chief executive and chief legal officer.
The dramatic events began to unfold during the morning when John Hemming, the deputy council leader, was tipped off by a whistleblower in the elections office.
Coun Hemming, who was at the Council House with police officers in a routine meeting to discuss postal ballot fraud, insisted on going immediately to search for the missing votes. He captured the entire episode on video.
Coun Hemming (Lib Dem South Yardley) said: "I was told by someone that there had been 'Envelope 4s' mislaid during the local elections and not counted.
"There was a plan to get rid of them, but one or more staff were unhappy about this and kept them.
"Envelope 4s are the postal ballots taken to the polling station and collected by the presiding officer. There can be one ballot or 20 ballots in one envelope.
"At the end of the meeting I explained, I had received a detailed allegation and wished to check for evidence and that I didn't want anyone to be able to warn the elections office that I wanted to inspect it with the police."
Coun Hemming said he had been told there was a box with 200 Envelope 4s in it in the archive room.
He said that after discussions with the police and the council's chief executive Lin Homer, who is also the returning officer, it was agreed an inspection would be made of the room on the fourth floor of the elections office.
"I went to the elections office with the head of the fraud squad, Dave Churchill.
"Lo and behold there was an orange crate high up on a shelf. When we took it down it was full of envelopes."
Coun Hemming said the envelopes had not yet been fully examined, but he believed they contained postal ballot papers from between ten and 15 wards.
Mrs Homer said: "Following an allegation received about uncounted votes, I authorised the council's chief legal officer and a police officer to visit the elections office.
"As a result of this visit, certain evidence has been handed over to the police and I have started an urgent investigation into the matter.
"In accordance with normal city council internal procedures, I have suspended two officers from duty as a consequence of the allegations made," she added.
A week ago a High Court judge ruled that six Labour city councillors in Aston and Bordesley Green owed their election in 2004 to a campaign of postal vote fraud. The six were sacked from the council.
Yesterday's meeting between council officials, politicians and police officers heard a plea by the fraud squad to be given permission to enter political offices in Birmingham during the runup to the General Election without a search warrant in order to check that postal votes are being properly dealt with.
The idea is being considered by the political parties.
More than 53,000 people in Birmingham have registered for a postal vote at the General Election on May 5 but, with three weeks to go until the deadline for applications, officials expect the final number to be higher.