Britain's Home Secretary Theresa May

Theresa May is to revive plans to abolish the UK’s main anti-fraud and corruption agency and bring it into her new FBI-style national crime force, according to officials familiar with the situation.

The home secretary has tried before to roll the Serious Fraud Office into the larger National Crime Agency but was forced to retreat three years ago after resistance from Conservative cabinet colleagues including Dominic Grieve, the former attorney-general, and Ken Clarke, who was justice secretary at the time.

Confusion over the future of the fraud-fighting body weighed heavily on the SFO, which lost a number of senior officials after that struggle. Legal experts say the latest plan will bring fresh uncertainty at a key moment for the agency, with one calling it “empire-building” on Ms May’s part.

The SFO, under the directorship of David Green since 2012, has tried to remodel itself as a tough prosecutor of economic crime and has persuaded the Treasury to top up its emptying coffers so that it can investigate cases such as the rigging of the London interbank offered rate (Libor).

When her plans were overruled earlier in this parliament, Ms May said the government would “review in due course” the “appropriate relationship” between the SFO and the NCA. Both Mr Grieve and Mr Clarke were ousted from the Cabinet in this summer’s reshuffle, leaving the home secretary clear to complete her unfinished reforms.

The move would give Ms May direct control over all white-collar crime, ending the current division whereby the Home Office controls the budget of the NCA while the attorney-general’s office oversees the SFO. Broadening the remit of the NCA’s economic crime command would also help to raise the profile of the new UK-wide agency, which replaced the Serious Organised Crime Agency last year.

Edward Garnier, the former solicitor-general, told the Financial Times: “We had this argument two or three years ago and all rational debate clearly suggested the SFO should remain an independent investigating prosecutor.

“David Green has got the SFO travelling forward with a sense of purpose. To distract it with having to fight off the NCA now, in the middle of the Libor criminal trial, would in my opinion be a disaster and damage the criminal justice system in the area of financial crime.”

The SFO was created in 1988 by a Conservative government as the solution to a series of City scandals. Unlike the police and NCA, it has investigators and prosecutors under one roof.

A spokesperson for the SFO said: “The SFO’s specialist teams of investigators, prosecutors and other experts are now vigorously pursuing the most serious suspected economic crime, including Libor and Forex rate-rigging. We know of no evidence which suggests that breaking up these teams and putting investigators and prosecutors into different organisations would be more effective.”

The SFO’s efforts to overhaul its image come after a damaging series of bungles and missteps, including secret exit payments to former senior staff, a fine from HM Revenue & Customs and the collapse of a high-profile corruption case. There was also its botched probe into the Tchenguiz brothers, which led to a £300m damages claim that was settled this summer.

The agency is already contending with a root-and-branch review, initiated by Ms May and Mr Clarke this summer, on how bribery is tackled in the UK.

The world’s first jury trial of a defendant accused of rigging Libor begins in January with an SFO prosecution given special “blockbuster” funding to pursue the case. Its director has also launched criminal probes into the rigging of the $5tn a day foreign exchange market; alleged overseas bribery by Rolls-Royce; the Ministry of Justice’s contracts with outsourcing groups G4S and Serco; and Barclaysdealings with Qatar concerning an emergency cash injection in 2008 at the height of the financial crisis.

“In the wake of the global financial crisis, the SFO has refocused its attention on City fraud and a number of high-profile cases are pending. This is not the moment to destabilise the SFO by foreshadowing its demise,” said Jonathan Fisher QC, a barrister specialising in cases of financial crime.

“If we are going to unbundle these arrangements we need a proper process of consultation,” said Stephen Parkinson, a lawyer at Kingsley Napley. “There’s no evidence that the NCA could do any better than the SFO.”

Labour has also drawn up proposals to overhaul the SFO should it win the election: its shadow attorney-general, Emily Thornberry, has argued that it should have more resources and be able to keep some of the penalties it successfully imposes.

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