Draconian police powers designed to deprive crime barons of luxury lifestyles are being extended to councils, quangos and agencies to use against the public, The Times has learnt.

The right to search homes, seize cash, freeze bank accounts and confiscate property will be given to town hall officials and civilian investigators employed by organisations as diverse as Royal Mail, the Rural Payments Agency and Transport for London.

The measure, being pushed through by Alan Johnson, the Home Secretary, comes into force next week and will deploy some of the most powerful tools available to detectives against fare dodgers, families in arrears with council tax and other minor offenders.

The radical extension of the Proceeds of Crime Act, through a Statutory Instrument which is not debated by parliament, has been condemned by the chairman of the Police Federation. Paul McKeever said that he was shocked to learn that the decision to hand over “intrusive powers” to people who were not police was made without consultation or debate.

“The Proceeds of Crime Act is a very powerful tool in the hands of police and police-related agencies and it shouldn’t be treated lightly,” Mr McKeever said. “There is a behind the scenes creep of powers occurring here and I think the public will be very surprised. They would want such very intrusive powers to be kept in the hands of warranted officers and other law enforcement bodies which are vetted to a very high standard rather than given to local councils.”

His concerns are shared by leading legal figures, who believe that there is a risk of local authorities abusing the powers to search people’s homes, seize their money, freeze their accounts and confiscate their property. They also see parallels with the spread of counter-terrorist surveillance powers to monitor refuse collections and school catchment areas.

Wideranging confiscation powers were given to police and law enforcement bodies in 2003 to seize the cash and property from drug dealers, people-traffickers and money launderers. They were viewed as “Al Capone powers” — a means of getting at the Mr Bigs of organised crime by seizing wealth accrued from criminality. David Blunkett, then Home Secretary, said law enforcement was targeting “the homes, yachts, mansions and luxury cars of the crime barons”.

The expansion of seizure powers is part of a Home Office plan to “embed” financial seizure across the criminal justice system. Ministers set a target to recover £250 million in criminal assets by 2010, rising to £1 billion per year soon after.

An “explanatory memorandum” says that a swath of financial investigators attached to the newly empowered bodies will be accredited, trained and monitored by another quango, the National Policing Improvement Agency. The memo adds that asset seizure will result in financial rewards: “Investigation bodies will receive a share of money recovered as additional funding to incentivise further work in recovering the proceeds of crime.”

Councils and other bodies had access to asset recovery powers before but only with with the authorisation and involvement of the police. Now they will be able to act independently of any police force or law enforcement agency.

The memo says councils and quangos will employ “trained internal financial investigators” and be “less reliant on more traditional law enforcement agencies, notably the police”.

The extension of such draconian powers to civilian investigators coincides with mounting legal concern about the operation of the law of confiscation. But the Home Office maintained last night that the measures would “boost the fight against crime” and “free up valuable police time”.

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