***UPDATED*** The BBC’s Robert Peston also confirms the story. He reports that Theresa May presented the proposals at Cabinet last week and that debate was “exceptionally difficult” with the BBC source saying there was almost no support for the break-up of the SFO.

The BBC reports that another source said: “The cabinet has agreed that the SFO model for tackling economic crime is the right one. The SFO will not be transferred into the NCA”.

The Financial Times reports the Home Office while continuing the push on economic crime has backed off of plans to split up the Serious Fraud Office.

In a clear back down from earlier plans Theresa May, Home Office Minister reportedly said to the FT today:

“What we’re doing in a number of areas is setting up the sort of arrangements that start to move us towards the National Crime Agency [NCA], the NCA structure, and then review in due course what the appropriate relationship is with the SFO and the NCA,”.

The SFO public reaction to the FT story was tempered the FT quoting an SFO source saying “It’s a step in the right direction but we need further clarification. We need more certainty than a nuance.”

We expect that it will be delighted with the further detail contained in Robert Peston’s BBC report in particular as SFO sources told us that Peston’s report last week which predicted the demise of the SFO dented morale at the department.

We reported a week ago that the SFO had won its fight for survival and is now seeking more powers to fight serious fraud and corruption.  It will continue to push for new powers and the news will be welcomed by SFO employees whose future has been clouded with uncertainty as a result of the original Home Office plans.

As we said last week the split up of the SFO was unthinkable and would have been a disaster.

Anyone doubting the SFO’s capacity to investigate and prosecute bribery should keep in mind it’s overwhelming objective of now cementing its future.

We anticipate an SFO fightback with a splash of enforcement activity using the Bribery Act.  We also expect the SFO to seek increased powers.

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