The greyhound racing industry has begun an inquiry into allegations of bung-taking and race-fixing that have defrauded William Hill, the bookmaker, as well as potentially thousands of gamblers.

A Sunday Times investigation at Newcastle stadium – owned by William Hill – resulted in one of the track’s racing managers being suspended on Friday.

When confronted by a reporter he admitted channelling bogus payments through the bank account of Barry Clements, until recently a greyhound trainer at the track. The racing manager made the payments appear legitimate by drawing up fake invoices, which were apparently countersigned by other senior officials.

Clements admitted he then paid a monthly bung of £500-£600 in cash to the racing manager – who in return allegedly attempted to fix races by allocating favourable starting positions for another owner.

Clements also admitted that he separately fixed a race earlier this year by swapping a slower dog for a faster one. He said he and his colleagues won thousands of pounds by betting on the dog.

William Hill announced that it had begun a full investigation, as has the National Greyhound Racing Club, the sport’s governing body.

Until earlier this year Clements kept a kennel of about 40 of his own greyhounds, which raced at Newcastle. He said he was blowing the whistle on his involvement after becoming “totally ashamed” of his treatment of dozens of greyhounds in his care.

“As soon as one is hurt you are under pressure to get rid of it. I had 23 put down in 10 months up to May this year and none of them needed to be medically euthanased.”

Clements said he became involved in channelling the “bungs” last year. He said the racing manager would tell a former trainer, whose dogs raced covertly under Clements’s name, how much money he wanted each month.

The racing manager would then put through extra payments on top of Clements’s legitimate winnings. Clements then gave the racing manager the cash bung.

“I can’t be sure what benefit the former trainer got,” said Clements. “But I noticed that he was getting favourable trap positions for his dogs, though I didn’t.”

The Sunday Times has decided not to name the racing manager because of concerns for his safety. When confronted he initially denied the scam, but when told of documents showing he had authorised payments exceeding what Clements was entitled to, he admitted defrauding William Hill.

“I needed the money,” he said. He said he shared the money with Clements and denied that any races were fixed or that anyone else was involved. Clements denied taking any money. The stadium’s other racing manager, Ian Hillis, is not implicated in the scandal.

William Hill said the racing manager had been suspended. “We treat any allegations of impropriety seriously and a full investigation is under way.”

Times Recommends

• Children who front atheist ads are evangelicals
• Killer heels? No, purring kittens
• My Week: Belle de Jour