Companies will be encouraged to own up to their own fraud and corruption and escape prosecution under an American-style fraud-fighting strategy to be adopted by the Serious Fraud Office (SFO).

The SFO is to undergo a radical overhaul, abandoning its traditional approach of handling just a few costly and lengthy investigations and prosecutions that run to several years and may not succeed.

Instead, in what is being called a "complete re-think" of the role of the SFO, it is to re-invent itself along American fraud-busting lines, including offering companies alternatives to prosecution.

These will include helping companies which "put their hands up" to fraud to wipe the slate clean and avoid prosecution by agreeing to certain steps or changes to their systems.

The radical package, a completely new shift of direction for the SFO, was outlined by Richard Alderman, who took over as director in April, as he launched the SFO annual report.

He said: "I said when interviewed for the job that what the SFO needed was a complete re-think, a radical overhaul in a way that meets corporate needs."

At present, companies under investigation took the view that they could delay and fight because "the SFO record was not that good."

He added: "If the SFO did not currently exist, would you want to invent it to do what it is doing now? The answer is ‘no’."

"I have been saying to people that we need to look at the role of the SFO in 2008 and in the future and what I think it should be about in the future is very different from what it has done traditionally."

The SFO will become more pro-active, helping educate people on how to protect themselves against fraud; tracing of fraudulent activity so that it can be disrupted at an early stage; and to get prosecutions much more quickly to court, he said.

Mr Alderman also plans greater use of recently acquired powers for civil recover orders, which enable fraudsters’ assets to be seized separately from powers available in criminal proceedings; and of "serious crime prevention orders". which enable conditions to be placed on companies and how they operate.

His blueprint for a re-cast SFO comes as the Office is in the spotlight after being castigated in the High Court over the halting of its corruption investigation into the BAE Systems arms deal with Saudi Arabia.

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