Police are investigating whether student records at the Whitehouse Institute of Design were accessed illegally before it was revealed that Tony Abbott’s daughter received an unadvertised $60,000 scholarship to attend the school.

In May, Guardian Australia reported Frances Abbott was attending the school on a “chairman’s scholarship” which angered fellow students who were unaware the opportunity existed. Abbott was only the second student to receive the scholarship in the school’s 25-year history.

Abbott was criticised for not declaring the scholarship on his pecuniary interests register. Les Taylor, chairman of the school’s board of governors, personally recommended Frances for the scholarship and is a Liberal party donor.

Surry Hills police confirmed to Guardian Australia they were “continuing” a criminal investigation in Sydney into the accessing of student records at the institute which led to the revelations.

The investigation began after Whitehouse Institute made an official complaint.

The institute’s chief executive, Ian Tudor, told Guardian Australia the confidentiality of student records was of “paramount importance to the institute, and given the magnitude of the breach of confidentiality we were obliged to report it to the police”.

Both the Abbotts and Whitehouse have said the scholarship was awarded on merit, and was not related to the political position of Tony Abbott. For this reason there was no need to declare the scholarship, the prime minister’s office maintained.

The school said scholarships were awarded on a “discretionary” basis, although its website states no scholarships are available for undergraduate degrees.

The institute last week emailed current and former students apologising for the alleged “inexcusable breach of privacy”, Guardian Australia was told.