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Police have raided the offices of the law firm at the centre of the leaking of the “Panama papers”.

Prosecutors said the operation had been carried out at the headquarters of Mossack Fonseca in Panama City to find evidence of money laundering and the financing of terrorism.

The data leak of 11.5 million confidential documents has exposed wealthy individuals, including heads of state, among those using offshore firms to evade tax and avoid sanctions.

Panama’s attorney general said police were searching for documentation that “would establish the possible use of the firm for illicit activities”.

Mossack Fonseca has denied any wrongdoing, saying it only set up offshore financial accounts and anonymous shell companies for clients and was not involved in how those accounts were used.

Police arrived at the firm’s building yesterday afternoon and were under the command of prosecutor Javier Caravallo, who specialises in investigating organised crime and money laundering.

The firm is accused of working with clients who were subject to international sanctions — including one with links to North Korea’s nuclear weapons programme.

The leaked documents apparently show it worked with 33 individuals or companies who have been placed under sanctions by the US Treasury including companies based in Iran, Zimbabwe and North Korea.

The firm tweeted that it “continues to co-operate with authorities in investigations made at our headquarters”.

Many other countries are investigating possible financial crimes in the aftermath of the leak. Mossack Fonseca partner Ramon Fonseca said the firm had been hacked via servers based abroad and had filed a complaint with the Panamanian attorney general’s office.

President Juan Carlos Varela has defended Panama’s financial sector but has promised to introduce reforms to make it more transparent. He asked France to reconsider its decision to place Panama on a list of unco-operative countries.

David Cameron was caught up in the scandal after the documents revealed his late father Ian set up an offshore company in Panama.

Iceland’s prime minister Sigmundur Davíð Gunnlaugsson was forced to resign amid mounting public anger that his family had sheltered money offshore.