It has emerged that the sudden closure of the ILA scheme was prompted by a reputable training provider alerting the DfES by producing a disc containing details of 1,000 accounts. When ministers became aware that similar lists could be giving fraudsters the ability to claim substantial funds without providing any services, they decided on immediate action. The National Audit Office is currently investigating the management of the scheme, and John Healey, minister for Adult Skills, may be question by the education select committee later today.

Capita, who ran the scheme's computerised account management, deny that there was a security breach caused by hacking, stating that the problem was with operators who had approved access abusing it to collect and misuse details. Capita has recently been nominated as the preferred bidder for the contracts to collect the BBC's "licence fee" tax, and that for traffic congestion charges in London.

Police are reported to be investigating 13 cases of fraud, and, according to the Financial Times, the DfES is referring another 42 cases to them.

As James O'Brien of Pitman Training explained to TrainingZone recently, reputable providers had been the first to warn of potential abuse of the scheme.