The Government has threatened to take criminal action against anyone who has made a fraudulent or dishonest claim under its furlough scheme.

Downing Street has pledged to do “everything possible” to claw back taxpayers’ money which has been wrongly handed out, Boris Johnson’s official spokesman said.

HM Revenue and Customs (HMRC) is currently looking into 27,000 “high-risk” claims, with a number of criminal investigations into suspected fraud now under way, he told a Westminster briefing on Tuesday.

It follows the disclosure that up to £3.5 billion may have been erroneously paid out under the national job retention scheme.

The Prime Minister’s spokesman said: “HMRC have sophisticated systems in place to assess all claims and to stop money being incorrectly paid in the first place.

“They have carried out checks both pre and post payment against claims that look out of step with the information that they hold on legitimate employers.

“They are currently looking into 27,000 high-risk claims where they believe a serious error or fraudulent claim has been made.

“Where genuine mistakes have happened HMRC will work with employers to correct claims but if any claim is suspected of fraud or is based on dishonest and inaccurate information payments may be withheld or need to be repaid.

“HMRC won’t hesitate to take criminal action in the most serious cases.”

So far one arrest for suspected fraud has been made, he confirmed.