The unit will act like the old Scotland Yard murder squad, being dispatched to forces lacking the manpower or expertise to investigate fraud.

Lord Goldsmith, the attorney-general, will announce proposals tomorrow for the City of London police economic crime unit to take responsibility for investigating fraud throughout England and Wales.

A national reporting centre is to be set up to collect intelligence on links between financial crime and terrorists. The National Fraud Intelligence Bureau will link the police and other government investigators with databases provided by the banks, insurance and credit card companies to cut the more than £14 billion annual cost of fraud.

It is intended to complement the work of the Serious Fraud Office, which will continue to investigate allegations of multi-million-pound corporate crime, especially in the City.

Ministers believe the squad is needed because of the growth in low-level fraud to fund terrorism or organised crime.

Much of this is missed either because police cannot afford to put resources into investigating frauds or because companies who discover they have been cheated do not report it for fear of damaging their reputation.

One official cited the case of shoplifters stealing clothes from shops and taking them back to exchange for cash. The investigation found this was part of a large-scale fraud co- ordinated from west Africa.

Goldsmith has described fraud as the new “crime of choice” for both organised crime and terrorist financiers.

Detective Chief Superintendent Steve Wilmott, head of the City of London economic crime unit, said his squad had already expanded to take on fraud inquiries for other police forces. Extending its remit would be relatively easy and less costly than creating a separate national squad that would need about 1,200 officers and cost about £56m a year to run.

“Just by simply joining up intelligence that is already there, we will be able to track down connections between the various frauds,” he said.

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