Police have smashed a £20 million stolen chequebook crime ring, making 35 arrests in dawn raids in the West Midlands and across the country.

A Royal Mail worker was among those detained as officers targeted a gang suspected of using chequebooks stolen from the postal system to obtain money from victims' bank accounts.

The investigation, code named Operation Bangor, was the largest ever undertaken by Barnet Police.

More than 1,500 chequebooks were reported missing, with householders shocked to discover that cheques ranging from £800 to £1,200 were being cashed from chequebooks they had never received.

The chequebooks had been sent in the post but never arrived.

The fraudsters targeted the Golders Green area of north-west London, where up to £5 million was believed to have been stolen in the scam.

Detectives also discovered cheques were being sourced elsewhere and carried out further raids in the West Midlands, Surrey, Kent, Cambridgeshire, West Yorkshire and Manchester.

The scale of the fraud is thought to be at this stage £20 million nationally.

The Royal Mail worker, said to be working at a London depot, is alleged to have stolen the chequebooks and passed them on to the gang to be paid into legitimate and bogus accounts, Scotland Yard said. More than 400 Metropolitan Police officers were involved in the arrests early yesterday morning.

They were accompanied by officers from the Department for Work and Pensions, the Immigration Service and the Post Office Investigation Department. Operation Bangor began in June last year when members of the public started calling Barnet police en masse to report large sums of money disappearing from their bank accounts.