A MANAGER working on a Government-sponsored project designed to breathe new life into business and job prospects in London faces jail after being led into fraud, a court heard yesterday.

A top team of consultants was brought in to run regeneration projects designed to give a vital new spark to Inner-City communities.

John Thompson joined partnership Business Process Improvements (BPI) in 1986 and agreed to help falsify performance figures to illicitly boost payments to the Cleveland-based management and training consultancy.

A judge at London's Southwark Crown Court was told by Charles Garside, QC, defending Thompson, that he became the "right-hand man" to Colin Hutchinson, the BPI partner running two north London schemes.

Last month, Hutchinson, 41, and Thompson, 45, changed their plea and admitted furnishing false information and false accounting between 1997 and 1998.

The offences relate to £200,000 of fraudulent claims over the numbers recruited to embark on national vocational qualifications, part of the overall project and sponsored by European and private funds.

Three charges of conspiracy to defraud between January 1996 and August 1998 were ordered to lie on the file.

Hutchinson and Thompson, both of London, will be sentenced tomorrow. They have been warned that custody is the most likely outcome.

Another BPI partner, Scott Brown, 38, of Alconbury, Cambridgeshire, was found not guilty, on direction, of conspiracy to defraud and false accounting.

In total, BPI was awarded contracts worth £1.5m as it undertook work.

BPI had its headquarters in Billingham, Teessside, and had other offices in Dorset and London