RUSSELL LYNCH

Up to £100,000 will be on offer for whistleblowers to come forward with cartel-busting information, the Office of Fair Trading said yesterday.

The incentive scheme is part of the watchdog's latest crackdown on anti-competitive collusion between businesses.

The OFT is one of the world's first competition bodies to offer rewards under the 18-month pilot scheme, although South Korea also pays for information.

Simon Williams, the OFT's senior director of cartels and criminal enforcement, said: "We believe that it is in the public interest to offer financial incentives in the hope that it will encourage more people who have good information about the existence of hard-core cartel activity to come forward."

The OFT has around 50 staff investigating collusion and already has the power to fine companies up to 10% of their turnover for cartel activity under the Competition Act.

Companies who come forward are treated leniently - Virgin escaped punishment last year for blowing the whistle on price collusion with British Airways - but this is the first time the OFT has offered rewards to individuals.

Rewards will be paid out on the quality of the information rather than the size of the fine or companies involved, the watchdog said.

Mr Williams added: "Cartels are not the preserve of big business - if a local authority needs to find a contractor to refurbish its schools, it is unacceptable for local contractors to seek to rig the tender process by colluding on price."

The OFT's powers have been broadened under the 2002 Enterprise Act, which makes it a criminal offence for individuals to take part in dishonest cartels. Current investigations involve allegations of price- fixing in sectors including construction and dairy produce.