Seventeen people have been arrested across three states and territories as part of a criminal probe into Victorian Labor’s $388,000 rorts-for-votes scandal. But the Victorian Labor state secretary criticised police for making the arrests during dawn raids, saying the party was cooperating with police.

MPs are not among those taken into custody in Melbourne, regional Victoria, New South Wales and the Northern Territory on Thursday, less than four months out from the November state election.

The arrests come six days after the launch of a police fraud squad investigation into the approval of taxpayer funds being spent on Labor campaign staff during the party’s successful 2014 election.

The state ombudsman has deemed the move was in breach of parliamentary guidelines, but added most participants thought they were acting in accordance with the law.

A former organiser of what has come to be known as the red shirts scandal said he was arrested at his Melbourne home shortly before 6am on Thursday for allegedly making a false document.

He was strip-searched and interviewed at the Melbourne West police station for an hour before being released and told he may be charged on summons.

Seventeen people were being interviewed in relation to the alleged misuse of parliamentary entitlements, police said.

Police would not confirm how many remained in custody.

The state secretary of Victorian Labor, Samuel Rae, confirmed on Thursday afternoon that “a number” of Labor party field organisers from the 2014 Victorian election campaign had been questioned by police, but not charged. He said the arrests occurred during dawn raids.

“We are providing legal assistance and will continue to support our people,” Rae said.

“At all times, the ALP has cooperated fully with authorities on this matter. Conducting dawn raids on people’s homes was completely unnecessary given those involved would have cooperated if asked.

“That had already been communicated to Victoria police by our lawyers earlier this week. We have also received a number of concerning reports about the raids, including that some of those questioned were told by Victoria police that they did not need legal representation during the interview process.”

The premier Daniel Andrews’ office declined to comment, while the opposition leader Matthew Guy, used news of the arrests to repeat his call for six cabinet ministers linked to the scheme, to step aside.

“The government can’t sustain this any longer,” he told reporters.

The ombudsman Deborah Glass in March found 21 past and present Labor MPs systematically misused public funds.

Labor MP Adem Somyurek said he had concerns about the scheme, adding he approached then-opposition leader Andrews, but was referred to former treasurer John Lenders who designed the operation.

Labor campaigner-turned-whistleblower, Jake Finnigan, said Thursday’s arrests only targeted the “unwitting dupes” of the scheme rather than the masterminds.

He also used the news to announce his candidacy for the electorate of Footscray, in Melbourne’s west, on November 24.

After the fraud and extortion probe was announced, the government asked police to investigate claims 18 Liberal and National MPs used electorate staff for campaigning during normal office hours.

Numerous ministerial advisors under the former Napthine government are also alleged to have not taken leave during the 2014 caretaker period, instead working for the then-state Liberal director.

Andrews on Wednesday told reporters he had been too busy to look at the evidence passed onto police, which the government refuses to release.