A major probe has been launched by police into an alleged fraud at Belfast City Council believed to involve up to £400,000 of ratepayers’ money.

The scam came to light after a company enquired about a missed payment of hundreds of thousands of pounds.

The council had informed the firm it had been paid— but the money had failed to appear in their bank account.

It is understood the account details of the legitimate firm had been accessed by someone posing as a council representative.

Another person acting as the contractor approached the council for payment and provided bank details. The funds were then transferred to the bogus account.

Belfast City Council would not comment on the amount of cash involved but it is believed to be between £250,000 and £400,000.

Police confirmed they are investigating a report of fraud and enquires were ongoing.

A council source said the public money should be recovered through insurance.

But councillors have now demanded an emergency meeting saying “full disclosure” is needed into how this happened.

Councillors have also said they are angry they were not informed about the incident that involves public money.

It is feared the council has become the latest target in a scam that has hit UK authorities over the last three years.

It is understood those behind the scam research firms carrying out work for councils. They then make a bogus call or contact the council claiming they are from the legitimate firm and say their bank details have changed.

They then ask the council to alter the details and pay the money into a new account.

There are set protocols in place for staff to follow when dealing with financial issues.

The council said they do not comment on individual cases involving members of staff, however it is understood at least one person who works for the council has been suspended while the investigation is being carried out.

There is no suggestion that any council employee was involved in any criminality.

A spokeswoman for Belfast City Council told the Belfast Telegraph: “The council is aware of an alleged external fraud and the matter is currently being investigated by the police.”

Belfast City Council could be the latest victim in a wave of bank scams against councils across the UK over the last three years.

In July 2012 Salford council in England was duped out of £130,000 when a council member of staff was persuaded to change bank details. The National Fraud Intelligence Bureau were alerted.

In 2010 South Lanarkshire Council in Scotland were conned out of £102,000. The cash was paid to a gang after receiving documents—supposedly from one of their suppliers - instructing a change of bank details.

Dozens of other authorities are also believed to have paid out to a gang of conmen, believed to be from west Africa.

A spokeswoman for the PSNI said: “Police have received an allegation of fraud. An investigation is underway and enquiries are continuing.”

Councillor Pat McCarthy said serious questions need to be answered immediately.“This raises questions about the leadership of the council about what else is being withheld from councillors and how this money will be replaced,” he said.

“This is a disgrace that elected members were not informed about this and the first we knew was after being contacted by journalists.

“There needs to be full disclosure.”

Another councillor said there was a need for “better transparency” in the council.

“Part of the problem is once again the delegated powers which have been given to the chief officers and information is not being imparted to us - even if it is a serious nature such as fraud, about ratepayers and money.”

Councillors have said a special meeting of the council is needed to discuss the issue.

The council's audit committee will receive a report next month regarding the matter.

Belfast Telegraph