Police cancel 800 credit cards in fraud probe after they were issued to detectives

About 800 cards have been cancelled while £1 million of spending is still unaccounted for, London Assembly members heard today.

In another development Scotland Yard revealed that a third man - a former police officer - had been arrested over the alleged credit card fraud.

A major inquiry was launched into the use of corporate Amex cards by Met officers after two detectives were arrested over claims that they used their cards to spend £70,000 on themselves, their friends and families.

Police said today that a 51-year-old former police officer - who resigned from the Met last month on a separate issue - was arrested on 21 December in connection with the probe.

The officer was a Detective Sergeant in the Met's Specialist Crime Directorate. Police refused to reveal why he had resigned.

Auditors embarked on a review of up to £6million in expenses from recent years which had never been properly signed off.

Len Duvall, the chairman of the Metropolitan Police Authority, told the Assembly's budget committee the episode had been "a disgrace" and that "senior detectives need to be aware of their responsibility about the use of public money".

He added that some criminal proceedings had started.

However, Metropolitan Police Commissioner Sir Ian Blair said: "The level of criminality is very small."

Sir Ian's chief accountant at the Metropolitan Police Authority, Ann McMeel, told the committee that investigators were trawling through thousands of credit card transactions for 2006 alone.

She said £1 million was still classified as "unreconciled expenditure".

Scotland Yard said the 800 cards had been withdrawn for a number of reasons.

A review was being carried out into all those who had been given cards and many officers had moved to roles where it was no longer considered necessary for them to possess credit cards.

In other cases there were credit card accounts that remained "unreconciled" for more than three months and in these cases the cards had also been cancelled.

Sir Ian Blair faced questions over his handling of the issue after it emerged members of senior management were warned about the lack of audit control as long as three years ago, but did nothing.

One detective used his card to pay for his wife's plastic surgery. Another is alleged to have flown first class with his family to Florida.

The lack of checks meant some American Express bills were sent straight to officers' homes, with the bill being paid automatically.