The Serious Fraud Office (SFO) is set to be abolished under plans published in the Conservative Party election manifesto unveiled by Theresa May on Thursday.
The Prime Minister said she would fold the organisation into the National Crime Agency (NCA), which fights organised crime, if she wins the general election.
The pledge follows a string of clashes between the SFO and May. As Home Secretary in David Cameron's government she had already argued it should be part of the NCA, This is Money reported.
The move dismayed lawyers and anti-corruption groups. Kingsley Napley partner Stephen Parkinson told the paper it was "dreadful news".
He said: "I have two main concerns. Firstly, that there will be organisational paralysis; people will leave the SFO in droves so it will lose expertise. Secondly, I fear momentum will be lost and there will be a failure to open cases that should be taken up."
Similarly, Corker Binning partner David Corker said: "The NCA has not yet proved its effectiveness and there is a great danger that the fight against fraud would be compromised if the SFO's work was absorbed into its broad remit."
Naomi Hirst, senior campaigner at Global Witness, said: "It is absolutely vital that the SFO remains independent from Government interference. Rolling the SFO into the NCA could seriously jeopardise the integrity of Britain's response to white collar crime, not strengthen it."
The SFO is currently investigating claims of fraud at Barclays over a Qatari fundraising in the financial crisis, whether senior Bank of England staff sought to rig Libor rates, and allegations about drug maker GlaxoSmithKline.
In February it charged Harlequin Group founder and chairman David Ames with three counts of fraud by abuse of position.
It declined to comment.
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