MPs and peers who claimed thousands for mortgages that did not exist are to face a criminal investigation, Scotland Yard confirmed last night.

Police were called in following public outrage at the way some MPs appeared to have abused the Parliamentary expenses system.

After an examination of claims and payments, detectives have decided that a small number of cases warrant a criminal inquiry.

Labour’s David Chaytor confirmed last night that he was one of the MPs to come under police scrutiny.

Former Government minister Elliot Morley and peer Baroness Uddin are also understood to be subject to criminal inquiries.

Two other MPs, Ben Chapman and Bill Wiggin, may also face further inquiries after it was revealed they claimed for mortgages that did not exist.

The police investigation is expected to focus on politicians accused of deliberately misleading the authorities or claiming “phantom mortgages”.

Baroness Uddin allegedly claimed an empty flat was her main home so she qualified for expenses given to peers living outside London.

Mr Morley, the MP for Scunthorpe, claimed £16,000 for a mortgage that did not exist.

When the expenses were revealed, he apologised and said the money would be repaid.

Mr Chaytor, who represents Bury North, pledged to repay £13,000 after admitting an “unforgivable error” in continuing to submit £1,175 monthly bills for a loan that had been paid off.

Last night, he promised to co-operate fully with the police and said he was waiting to hear from them.

Mr Chaytor said he was keen to clear his name. “The police want to talk to me and I’m very happy to talk to the police,” he told the BBC.

Mr Chaytor and Mr Morley have both announced they will stand down at the next election.

In a statement, the Labour Party said: “It would be inappropriate to comment on an ongoing police investigation; however we always expect all Labour Party representatives and members to co-operate fully with the police. The Labour Party has already taken tough action on expenses, including barring MPs found to have broken the rules from standing as Labour candidates at the next General Election.”

The Conservative Party declined to comment.

The expenses scandal rocked Westminster and provoked a public backlash.

Police were called in following demands for a criminal inquiry.

The calls were led by Middlesbrough Mayor, and former police officer Ray Mallon.

There will be huge pressure on the officers involved after criticism that police inquiries into Westminster affairs have repeatedly failed to lead to prosecutions.

The investigation will be conducted by officers from the Met’s Economic and Specialist Crime Command, overseen by Temporary Assistant Commissioner Janet Williams.

It is understood the joint panel of experts will continue to consider a small number of other individuals.

A Metropolitan Police spokesman said: “After consideration by the joint Metropolitan Police and Crown Prosecution Service assessment panel, the Met has decided to launch an investigation into the alleged misuse of expenses by a small number of MPs and peers.”

The decision follows several weeks of preliminary inquiries by a team of police investigators, prosecutors and legal experts.

Scotland Yard declined to name the MPs or peers at the centre of the police inquiries or their political allegiance.

Commissioner Sir Paul Stephenson has held a series of talks with Director of Public Prosecutions Keir Starmer over the allegations.

The senior officer said his detectives would follow the evidence. “We will make a decision on what the evidence is or is not,” he said.

He said the Parliamentary authorities had given “good co-operation” after investigators asked for more information.

Earlier this month, the Metropolitan Police ruled out wide-ranging action against the vast majority of Parliamentarians embroiled in the controversy.