Janet Roberts, director of Tendering for Care, which advises voluntary organisations on procurement, wrote to umbrella body Navca warning that its members could fall foul of European law by working together and effectively fixing prices.
Her views sparked concern at Navca, which has been urging its members to collaborate on bids for large-scale projects so they can compete with large organisations from the public and private sectors.
Navca wrote to the Office of the Third Sector, which advised the umbrella body that there was a theoretical risk of consortia creating a cartel or monopoly in breach of European competition law, but no example of this happening. It said charities should continue working in partnership.
"We've been encouraging organisations to form consortia for a year now and were very worried when there was a suggestion from Tendering for Care that this could be breaking the law," said Kevin Curley, chief executive of Navca.
"Forming consortia is the only way we can preserve the unique role of small, local charities in a field with obvious advantages for big charities that can achieve economies of scale.
"So we are much re-assured by the Office of the Third Sector, and it's full steam ahead."
Barnardo's is leading a consortium of children's charities in Wakefield, West Yorkshire; in Lancashire homelessness charities have joined together to win a Supporting People contract; and the North Yorkshire Forum for Voluntary Organisations has brought together social care charities in the area. Twelve voluntary organisations in Lancashire, led by social inclusion charity Developing Initiatives Supporting Communities, known as Disc, have won housing support contracts.
The Office of the Third Sector said it continued to support the principle of partnership working where it enabled organisations to deliver a better service.
Its letter to Navca, it said: "Theoretically, where a consortium in a specific locality created a monopoly or cartel situation which distorted fair competition, this may be in breach of EU competition law.
"There may also be another issue around state aid, where the consortium may have been in receipt of technical assistance to devise the bid. However, we are not aware of any example of this ever happening."