New York (CNN) -- Prosecutors have discovered troubling believability issues with the woman once called extremely credible in her sexual assault allegations against former International Monetary Fund Director Dominique Strauss-Kahn, an official familiar with the case told CNN late Thursday.
Based on these concerns, prosecutors called a meeting Thursday with Strauss-Kahn's defense team to disclose the issues discovered with the hotel housekeeper's allegations, the official said.
The acknowledgment came shortly after an official close to the defense team told CNN there were "serious issues regarding the credibility" of a hotel maid who has accused Strauss-Kahn of sexual assault.
Strauss-Kahn's defense team will ask a judge for bail modifications at a court hearing slated for Friday morning, the official said.
"Prosecutors will not object and, in fact, will ask for a bail reduction," said the official familiar with the case.
NYPD Deputy Police Commissioner Paul Browne told CNN he had "no comment" on the alleged credibility issue with the witness.
The New York Times, citing unnamed law enforcement officials, reported Thursday on its web site that the case against Strauss-Kahn was on the "verge of collapse as investigators have uncovered major holes in the credibility of the housekeeper."
Strauss-Kahn pleaded not guilty June 6 to seven charges involving a May 14 incident in which a housekeeping employee at New York's Sofitel hotel accused him of sexual assault.
In previous court appearances, the judge said that if Strauss-Kahn wanted to leave the city, he would require the court's permission. Strauss-Kahn, who says he is innocent, was previously required to turn over his French passport and United Nations travel credentials to authorities.
Strauss-Kahn was released from jail on bail but is under house arrest in a luxury townhouse in New York's Tribeca neighborhood.
He is under court-ordered watch as part of the terms of his $6 million bail agreement and must pay for 24-hour armed guards posted at the door, as well as electronic surveillance.
Strauss-Kahn, who was considered a front-runner in France's presidential race before his arrest, faces charges that include criminal sexual acts and sexual abuse.