Euro notes withdrawn by British wholesalers

British bank wholesalers have withdrawn €500 notes from sale because they are fuelling organised crime, it can be revealed yesterday.

The decision to end trading was made after police found nine out of every 10 of the notes in circulation are linked to crime, tax evasion and terrorism.

It closed an annual €500 million (£424 million) trade in the distinctive largest denomination euro note among businesses across the country.

The Serious Organised Crime Agency, which coordinated the voluntary industry move, said there is "no credible legitimate use" for the note in Britain.

Officials have been watching the market for signs of criminals changing tactics since trading secretly stopped about one month ago.

They have been expecting to see drug smugglers, people traffickers and other top-level crime gangs struggling to launder their profits as a result.

The distinctive pink and purple note is a favourite with criminals because it takes up less space than other currencies and is accepted across the continent.

Tourists and other legitimate customers will not be affected by the changes and the €500 note remains legal tender.

Ian Cruxton, Soca deputy director, said: "There is no doubt that the main UK demand for the €500 note comes from serious organised criminals.

"The banknote wholesalers have shown decisive leadership in withdrawing supply.

"This is a bold and welcome move which will cause substantial disruption to criminals' ability to move and launder large quantities of cash."

One senior official at Soca's Financial Investigation Unit said an inquiry revealed €500 notes are inextricably tied to serious crime. He said: "As we developed a picture it became clear. What was previously only an anecdotal suggestion was borne out by the figures.

"Our analysis found that only about 10 per cent of €500 notes sold in the UK retail market were used legitimately."

The official said pulling the plug on the wholesale market may flush some criminal activities into the open.

He added: "We anticipate criminals will be moved out of their comfort zone and will have to use other mechanisms for moving cash.

"They will not be able to use their favoured mechanism and that in turn will draw attention to their activities and offer up opportunities for law enforcement."

The €500 note has long been a favourite of top-level criminals and vast quantities have turned up in raids on drugs gangs from London to Latin America.

Dubbed the "bin Laden" because everyone knows what it looks like but rarely sees one, crooks love its portability.

The same value in cash takes up only a tenth of its Sterling alternative, making it easier to smuggle across borders.