A CORRUPTION investigation into the alleged misuse of £25 million of taxpayers’ money has been held up for a year because of a legal error, The Argus can exclusively reveal.

The investigation into alleged improper awarding of contracts by Brighton and Hove City Council has been hampered because evidence gathered almost two years ago was seized under invalid search warrants signed off by a crown court judge.

The Argus understands the delay centres on a form filling error which meant the warrants were granted under the wrong section of the Police and Criminal Evidence Act.

Officers have been unable to look at potentially key evidence since May last year after lawyers representing five defendants launched a judicial review.

Sussex Police are set to launch a fresh legal challenge this month in a bid to gain access to the evidence.

The delay means five defendants arrested on suspicion of misconduct in public office and corruption are facing the prospect of two-and-a-half years on police bail, while three other individuals including former head of housing Jugal Sharma remain under suspicion.

The investigation is already well into its third year since its launch by the Sussex Police Economic Crime Unit in November 2013.

It followed an investigation by the council's audit team into claims contracts worth more than £25 million were improperly granted over ten years to property management firm KEM, run by Mr Sharma’s brother Ashley Parker.

In August 2014, homes were raided across Sussex, Essex and London with computers and files seized.

In May 2015, police were told solicitors had started judicial review proceedings into the validity of the warrants.

With the judicial review in process, police officers were prevented from looking at evidence seized under the warrants but have been able to continue enquiries using other material gathered.

Last month the police reached an out of court agreement accepting the warrants were "not technically valid" while five of the eight suspects in the case have had their bail extended to February.

Graham Cox, former Sussex Police detective superintendent, said: "This sort of mistake is not completely unheard of when it comes to financial cases because some of the legislation is very complex.

"I have heard of some examples of the police getting it wrong, using the wrong piece of legislation, but for a warrant issued by a crown court judge, that is quite unusual.

"Usually it is a great big long document, usually drawn up by a financial investigator or the CPS, that is signed off by a judge.

"You would like to hope the judge would have checked it thoroughly but maybe they assumed it was right."

A Sussex Police spokesman said: “This delay has had an impact on all parties, not least those still under suspicion, and it is regrettable for everyone that the course of justice has been delayed this way.”