Intelligence services have privately expressed their astonishment that senior detectives fell for the lies of Carl Beech, the fantasist and paedophile who invented a child sex abuse ring involving spy chiefs.

The decision to launch a multi-million murder inquiry based on Beech’s allegations - without any evidence or proof - has rocked faith in the Metropolitan Police, Britain’s largest force with responsibility for counter-terrorism.

Beech claimed that members of the VIP paedophile gang included both former heads of MI5, Sir Michael Hanley, and MI6’s Sir Maurice Oldfield.

Beech, 51, from Gloucester, had told Scotland Yard detectives in interviews in 2014 that Hanley had kidnapped his beloved pet dog Heron as a warning for missing a rendezvous with his child abusers.

Beech also claimed that one of three child murders he had witnessed followed an order from Hanley for him and three other boys to choose which of them was to die. One of the children was then beaten to death by the gang.