A national intelligence unit to target organised benefit fraud has been unveiled by Social Security Secretary Alistair Darling.

The unit, which will combine the efforts of the Inland Revenue, police and immigration authorities, aims to crack down on fraud estimated to cost taxpayers up to £7bn each year.

It will aim to target increasingly sophisticated organised gangs who are defrauding the benefits system of hundreds of thousands of pounds.

Last year six professional fraudsters who stole £1.5m were successfully prosecuted. The gang used more than 100 different identities to cash cheques at post offices around London.

The new unit is part of a wider package of measures to foster what Mr Darling has dubbed an "anti-cheat culture".

He said: "Organised criminal gangs are becoming increasingly sophisticated in their methods and it is vital that we remain one step ahead of them.

"The new National Benefits Intelligence Unit will draw on the expertise of our top fraud investigators, as well as intelligence from other agencies, including the police, local authorities, the immigration service and others."

Other measures to combat benefit fraud include a publicity campaign using advertisements on television and in regional newspapers, due to be launched in the spring.

The campaign will focus on the cost of benefit fraud to education and welfare.

Mr Darling said: "Our greatest ally in the battle against welfare cheats is the public.

"Valuable intelligence is already provided by thousands of people through the fraud hotline. From this spring we will be starting a major fraud publicity campaign to help shift public attitudes."

'Unacceptable'

The launch follows a damning report which described the level of fraud in Britain as "totally unacceptable" and demanded significant improvements in the way cases are handled by the Benefits Agency.

The House of Commons Public Accounts Select Committee report said poor administration and inadequate computers were allowing widespread abuse of the benefits system.

After the report was published, Mr Darling insisted the government was turning the tide against benefit fraud.

"It is completely unacceptable to have fraud and error on this scale," he said.

"We must show zero tolerance. These people are not loveable Arthur Daleys, but are stealing the money we all contribute to help those who need it most."

Shadow social security spokesman David Willetts criticised the announcement as a panic reaction to the reports into benefit fraud.

He said: "We hope this new unit succeeds, but the government's dismal track record so far does not inspire confidence.

"The real problem is the system is far too complicated and it needs to be simplified.

"Alistair Darling is failing to tackle this fundamental problem, indeed he is making it worse."