TAX investigators raided two addresses in Blackburn as part of an investigation into a multi-million pound platinum VAT fraud.

Officials carried out the dawn swoops in a bid to bust what has been described as an "organised crime syndicate."

A total of 12 domestic and business premises across the country were searched as part of the probe.

A number of items were seized, including computer hard drives, mobile phones, business records and accounts.

Officials said the initial estimate of the amount involved was £2million but the final figure is expected to be much more.

Investigators believe a network of companies has been trading in precious metals such as platinum, purchased VAT-free in Europe and then sold on in the UK with falsified paperwork to cheat the tax system.

Regarded as the precious metal for the "New Millennium", platinum is said to be 30 times rarer than gold and costs around £200 an ounce.

The white metal is mainly produced in South Africa and Russia.

Speaking after the operation Martin Greening, HM Revenue and Customs head of criminal investigation North West, said they were committed to stopping "ruthless attacks" on the VAT system.

The other raids were in Altrincham, Bradford, Preston, Leicester and Sheffield. However Customs officers refused to name the addresses which were searched while investigations were ongoing.

Mr Greening said that the trade in precious metals is low volume but high value, as a small amount of metal is worth a large amount of money, making it a potentially attractive sector for abuse.

He said: "Tackling VAT fraud is one of HMRC's top priorities.

"We have a duty to stop money being diverted and stolen from the nation in what are often large scale and ruthless attacks on the VAT system.

"The searches are the result of a lengthy investigation by dedicated officers who work tirelessly and diligently, fighting criminal attacks on the tax system.

"The sophistication of the organised crime gangs behind these frauds means that our investigations are increasingly complex but we are committed to bringing the criminals responsible to justice and to recovering the money stolen from the British taxpayer, wherever in the world our investigations lead.

"This is not victimless crime, it's organised crime that causes real harm."

No arrests have been made but inquiries are continuing.

Blackburn jeweller Phil Ainsworth said a licence was needed to import platinum.

He said: "You do hear rumours of people importing it illegally, but we only deal with reputable suppliers and you know where you are getting it from."

Audley ward councillor and businessman Salim Lorgat said the current VAT system was open to abuse.

He said: "I used to run a furniture exportation business and understand the system very well.

" There are unscrupulous people that will trade without passing the VAT on.

"This is a scam that's going on all over the country and we are hearing more and more about it.

"I remember seeing a programme a few years ago about people bringing in precious metals from Holland.

"The problem is there is a huge market for things like expensive 22 carat gold within the Asian community here in Blackburn.

"The profit margin on it is only one or two per cent so people are obviously exploiting VAT as a means of increasing that profit."