THE organisers of the 2012 Olympics are preparing to use undercover surveillance to prevent construction firms from cheating to win £3 billion of contracts to stage the London event.

The Games’ project officials will ask the Office of Fair Trading to use new MI5-style techniques, including paid secret agents, to stop building work from being hijacked by cartels.

The disclosure follows a major OFT investigation into alleged market corruption that discovered that building firms pay each other bungs of up to £50,000 to lose contracts deliberately.

Official inquiries raised concerns that more than 1,000 construction contracts worth up to £500 million had been subject to collusion.

Simon Williams, the director of cartel investigations, today makes a startling appeal through The Times for whistle-blowers such as secretaries and other staff in construction to volunteer to become undercover agents. They could be paid and would be protected.

The OFT has begun to make use of new rights, which include powers to break into, bug and eavesdrop homes and hotel rooms, track vehicles and follow suspects. Public sector purchasers such as schools and health centres have emerged as principal victims of market-riggers.

Special efforts are being made to protect the London Olympics. Ray Payne, the head of procurement for the 2012 Games, said that he would be asking the OFT to help to prevent price-fixing, using subterfuge if needed.

Mr Williams made a plea for volunteers across the construction industry and other sectors who know about bid-rigging to become informers.

“What people need to do, if they are thinking of getting information to us, is get on that phone to me and, on a no-names, one-to-one basis, discuss with me what we can do with them to make sure we get the information we need,” he said.

“A typical example might be: the boss sacks his secretary, the secretary is not terribly amused by that and decides to tell the regulator. It may be a sales manager being asked to indulge in collusive behaviour on behalf of their company, which they don’t feel comfortable with. It could be somebody who is themselves knee-deep in cartel conduct who wants an exit strategy.”

The OFT was granted powers under a statutory instrument in 2003 to join intelligence agencies such as MI5 to go undercover for the country’s “economic wellbeing”.

Mr Williams confirmed for the first time that the powers were being applied. “We can do all kinds of different types of surveillance,” he said. “I can’t, for operational reasons, give you precise details of the extent to which we have made use of these powers but I am happy to say that the use has actually been quite modest.”

He confirmed that the OFT was already relying on “human intelligence sources”. “The take-up of what is effectively our informant programme has not been as good as I would wish,” Mr Williams said. “I would want people in the construction industry and elsewhere to understand that we have this programme and our officers have been trained by the best to run informants.” Mr Williams disclosed that the spies might be paid. “We will be making a decision on that in the not-too-distant future.”

He promised that the safety of informants was paramount. “We play a professional game. It’s possible somebody will remain within an organisation, which is involved in wrong- doing, as an informant.”

The wide ranging investigation into the construction industry began with a tip-off from a health trust concerned about contracts at the Queen’s Medical Centre in Nottingham.

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