Business Administration and Information Technology, the training body based at the council's Metrochange House training centre, has been suspended by the LCCI from registering students or teaching them pending an investigation which is expected to take several weeks.
Investigators are looking into allegations that course work was passed by unqualified staff, lost or not returned and that 41 certificates were awarded without students completing the necessary units.
A council spokesman said that all the trainees affected were being contacted and advised of their situation and that procedures at the council's other training providers were under review.
The decision to investigate comes just six weeks after the Government promised a crackdown on improper payments to training groups awarding job-related training certificates.
Michael Bichard, permanent secretary at the Department for Education and Employment, told the MPs in the all-party public accounts committee pound;15 million was wrongly paid to training providers last year.