US prosecutors say Paul Manafort, Donald Trump's former campaign chief, has breached a plea bargain agreement by repeatedly lying to the FBI.
Manafort was convicted of financial fraud in August relating to his work as a political consultant in Ukraine.
He then accepted a plea deal on other charges in return for co-operating with Robert Mueller's probe into alleged Russian meddling in the 2016 election.
Manafort's lawyers say they believe he provided truthful information
However, Special Counsel Robert Mueller said that Manafort lied "on a variety of subject matters" after signing the plea deal.
The latest development means that Mr Mueller's investigation has lost a key witness.
Manafort's lawyers insist that he did not breach the plea deal - however, both sides now agree that there is no reason to delay sentencing.
President Trump lashed out at the special counsel on Tuesday morning.
....The Fake News Media builds Bob Mueller up as a Saint, when in actuality he is the exact opposite. He is doing TREMENDOUS damage to our Criminal Justice System, where he is only looking at one side and not the other. Heroes will come of this, and it won’t be Mueller and his...— Donald J. Trump (@realDonaldTrump) November 27, 2018
....terrible Gang of Angry Democrats. Look at their past, and look where they come from. The now $30,000,000 Witch Hunt continues and they’ve got nothing but ruined lives. Where is the Server? Let these terrible people go back to the Clinton Foundation and “Justice” Department!— Donald J. Trump (@realDonaldTrump) November 27, 2018
What was the plea deal?
In August Manafort was convicted on eight counts of fraud, bank fraud and failing to disclose bank accounts.
A month later he pleaded guilty to one charge of conspiracy against the US and one charge of conspiracy to obstruct justice in a plea bargain with Mr Mueller. The agreement avoided a second trial on money laundering and other charges.
The plea deal meant Manafort would face up to 10 years in prison and would forfeit four of his properties and the contents of several bank accounts - but deadlocked charges from the previous trial would be dismissed.
It was the first criminal trial arising from the justice department's investigation into alleged Russian interference in the presidential elections.
However, the charges related only to Manafort's political consulting with pro-Russian politicians in Ukraine, largely pre-dating his role with the Trump campaign.
The White House has insisted that the guilty plea had absolutely nothing to do with President Trump.
What does Robert Mueller say now?
In a court filing on Monday, Mr Mueller said that after signing the deal "Manafort committed federal crimes by lying to the Federal Bureau of Investigation and the Special Counsel's office on a variety of subject matters".
The filing did not give details of what Manafort allegedly lied about.
In the same filing, Manafort's legal team said their client had "provided information to the government in an effort to live up to his co-operation obligations".
"He believes he has provided truthful information and does not agree with the government's characterisation or that he has breached the agreement," his lawyers said.
As prosecutors allege he breached the agreement, Manafort could now potentially face harsher sentences or have charges against him re-filed.
Manafort has been held in a detention centre in Virginia since June.
What are the wider repercussions?
This is seen as a blow to Mr Mueller's Russia probe. As investigators no longer believe Manafort is a credible witness, they will not be able to use his testimony in their case.
Experts say Manafort could now face a longer prison sentence and more criminal charges.
One lawyer told Reuters that the consequences could be "potentially devastating" for Manafort.
However, some observers have speculated that Manafort might be hoping for a presidential pardon.
How did we get here?
Manafort, 69, worked for the Trump presidential campaign for five months in 2016 and was in charge when Mr Trump clinched the Republican party nomination.
President Trump has branded the Mueller investigation a "witch hunt" and insisted there was no collusion between his team and Russia. The Kremlin has also repeatedly denied any meddling.
Manafort was charged by Mr Mueller last October and at trial he was accused of using 31 foreign bank accounts in three different countries to evade taxes on millions of dollars.
Prosecutors presented evidence of Manafort's luxurious lifestyle, saying it was only possible because of his bank and tax fraud.