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Police are investigating payments made by three firms — Beresfords, based in Doncaster, Wake Smith, from Sheffield, and BRM Solicitors, from Chesterfield — to a company called Indiclaim, which is owned by a UDM employee, Clare Walker.

Miss Walker, 41, earned £260,000, including her bonus, for a 20-hour week last year as the UDM’s head of claims at Vendside. She drives a £110,000 Bentley when she is not using her £61,000 company BMW.

The UDM insists that Indiclaim is a private training company and has no connection to the union or any individual claimants. But the three solicitors’ firms have said that their payments to Miss Walker’s company were linked to the settling of UDM claims.

Miss Walker’s £500,000 home in a South Yorkshire village was raided last week by detectives who removed documents and two computer hard drives. She has not been arrested and denies any wrongdoing.

Brian Wilson, a former Labour Minister, has claimed that senior DTI officials gave preferential treatment to the UDM when the agreements to handle compensation claims were signed in 1999. Mr Wilson said that when he became Energy Minister in 2001 he “inherited a situation in which an arrangement had been entered into with the UDM which was extremely favourable to that organisation”.

Mr Wilson said that he “repeatedly questioned this and also rejected advice from officials that would have resulted in the position of the UDM being strengthened still further”.

He welcomed yesterday’s announcement of an external review and said that he looked forward to an explanation of the DTI’s decision to sign an agreement with the UDM that was not offered to other mining unions. Before yesterday’s announcement, Mr Wicks had already ordered urgent action by his department in response to the unfolding scandal.

On June 30 , two days after the first revelations were published in The Times, Mr Wicks demanded to know what the UDM intends to do “in respect of the individuals subject to investigation”. The union responded by announcing that Miss Walker and Mick Stevens, the UDM’s vice-president, were voluntarily standing down pending the outcome of the police inquiry.

CLAIM LINE

1997: High Court finds British Coal negligent in test case for miners with vibration white finger

1998: British Coal found negligent in test case for miners with chronic lung diseases

1999: DTI, responsible for privatised British Coal’s liabilities, signs two claims-handling agreements with claimants’ solicitors’ group and UDM

2004: John Mann, MP for Bassetlaw, in north Nottinghamshire, begins campaign to highlight alleged abuses of coal health compensation scheme. Law Society investigates complaints against solicitors’ firms

June 28, 2005: The Times reveals how solicitors and senior UDM figures benefited from compensation scheme. Police announce inquiry

June 30: Malcolm Wicks, Energy Minister, makes statement to Commons pledging immediate action over Times allegations

July 5: High Court judge holds extraordinary review of compensation scheme

July 14: Detectives raid home of UDM employee Clare Walker, removing documents and computer hard drives

July 21: Government announces independent inquiry into DTI’s running of scheme. Serious Fraud Office takes over criminal investigation in partnership with South Yorkshire Police

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