Ministers and senior police officers have set out sweeping new powers to confiscate the assets of convicted or suspected criminals.

"Taking the profit out of crime will help dismantle and disrupt criminal enterprises. It is not acceptable that people should enjoy the proceeds of criminal activity and live a life of luxury including big houses, swimming pools and fast cars when it is built on the misery of victims or activities which damage or exploit society," said Home Office minister, Bob Ainsworth.

Under the measures the courts, police and a newly set up Assets Recovery Agency will be able to adopt a three-pronged strategy to confiscate or tax the assets or income of criminals - even if they have not been convicted of an offence.

And Ainsworth told journalists that a failed prosecution in a criminal court "would not preclude" further pursuing a suspect's assets under a lesser "civil standard" of proof in the high court.

"Being found guilty or not guilty in the criminal courts will not preclude looking at criminal assets that exist," he said.

The latest draft of the Proceeds of Crime Bill also gives the police and the Customs and Excise sweeping powers to search for and seize cash suspected to be "derived from or intended for use in crime".

And tough new measures to crack down on money laundering will create a single set of offences and will introduce a new "negligence" offence for financial institutions that fail to report suspicious transactions.

Human rights campaigners have blasted the new proposals claiming that the bill "threatens the innocent [and will] undermine core standards of criminal justice".

The government's sweeping new powers to confiscate the "lifeblood" of crime gives radical new powers to law enforcement agencies and are among the most controversial proposed.

Convicted felons who are found to have "a criminal lifestyle" will face the confiscation of their assets on a new mandatory basis. And the Crown Courts will be able to restrain or freeze an individual's finances at the start of criminal investigations.

Where "criminal proceedings are not available" a newly created Assets Recovery Agency will be able confiscate assets following action in the high court, before a judge rather than a jury and under the lesser burden of the civil standard of proof - on the balance of probabilities rather than beyond reasonable doubt.

"Cases would be referred to the agency once authorities have concluded, applying their normal evidential and public interest tests, that criminal prosecution is not available," states an HO briefing note.

And if the courts fail the ARA's director will have powers to assess for taxation an individual's income "where he has reasonable grounds to suspect that [it] was derived from crime".

"If there are people enjoying a lavish lifestyle but they never paid a penny in tax and yet we can't for whatever reason pursue acriminal investigation, why should they be allowed to do that?" said Ainsworh. "It's perfectly reasonable to give the agency the power to go out and get their assets."

The government argues that the new powers are necessary to crack down on 400 "major crime bosses in the UK, the so-called untouchables" who have a combined crime wealth of £440 million. Just 39 people, the Home Office claims, have amassed personal fortunes worth £220 million.

And the Association of Chief Police Officers has identified between 60-70 individuals in the Midlands, Merseyside and West Yorkshire police areas that have suspicious assets of over £100,000.

Bob Ainsworth has set law enforcers tough targets to double the value of property seized to £60 million by 2004. Similar legislation in Ireland has seen agencies seize assets at "10 times the rate" of the UK, the minister said.

The Home Office believes that the redrafted bill contains sufficient safeguards to protect the innocent or to prevent civil recovery proceedings being used to seize the assets of third parties uninvolved in criminal activity.

The government has taken heart from three recent human rights cases in Strasbourg, where the use of the civil standard test was accepted as a basis to legitimately seize the assets of suspected criminals.

But human rights campaigners disagree, Liberty director John Wadham believes that civil confiscation proposals erode the basis of justice, a presumption of innocence.

"These proposals undermine the presumption of innocence. There will be no jury and the judge will take the decision on the 'balance of probabilities' - a person will be 'convicted' on the basis they are 'probably' guilty," he said.

Wadham believes that the courts already have sufficient confiscation powers and that the new proposals are "a very significant expansion of the power of the state and the police over our lives".

"Of course the police will say they 'know' who is guilty and the current rules prevent them from obtaining sufficient evidence for a conviction. But these proposals will increase the likelihood of innocent people being convicted. They will not be imprisoned but they may have their home and property taken away, might well lose their jobs and they will have been 'convicted' in the eyes of the public."

House of Commons

First reading: October 18 2001 (HC Bill 31)

Second reading: October 30 2001

Standing Committee B

• First sitting: November 13 2001 (am)
• Second sitting: November 13 2001 (pm)
• Third sitting: November 15 2001 (am)
• Fourth sitting: November 15 2001 (pm)
• Fifth sitting: November 20 2001 (am)
• Sixth sitting: November 20 2001 (pm)
• Seventh sitting: November 22 2001 (am)
• Eighth sitting: November 22 2001 (pm)
• Ninth sitting: November 27 2001 (am)
• Tenth sitting: November 27 2001 (pm)
• Eleventh sitting: November 29 2001 (am)
• Twelfth sitting: November 27 2001 (pm)
• Thirteenth sitting: December 4 2001 (am)
• 14th sitting: December 4 2001 (pm)
• 15th sitting: December 6 2001 (am)
• 16th sitting: December 6 2001 (pm)
• 17th sitting: December 11 2001 (am)
• 18th sitting: December 11 2001 (pm)
• 19th sitting: December 13 2001 (am)
• 20th sitting: December 13 2001 (pm)
• 21st sitting: December 18 2001 (am)
• 22nd sitting: December 18 2001 (pm)
• 23rd sitting: January 8 2002 (pm)
• 24th sitting: January 10 2002 (am)
• 25th sitting: January 10 2002 (pm)
• 26th sitting: January 15 2002 (am)
• 27th sitting: January 15 2002 (pm)
• 28th sitting: January 17 2002 (am)
• 29th sitting: January 17 2002 (pm)
• 30th sitting: January 22 2002 (am)
• 31st sitting: January 22 2002 (pm)
• 32nd sitting: January 24 2002 (am)
• 33rd sitting: January 24 2002 (pm)
• 34th sitting: January 29 2002 (am)
• 35th sitting: January 29 2002 (pm)
• 36th sitting: January 31 2002 (am)
• 37th sitting: January 31 2002 (pm)
• 38th sitting: February 5 2002 (am)
• 39th sitting: February 5 2002 (pm)

Remaining stages: February 26 2002and February 27 2002

House of Lords

First reading: February 28 2002 (HL Bill 57)

Second reading: March 25 2002

Committee:

• 1st day: April 22 2002
• 2nd day: May 13 2002
• 3rd day: May 27 2002
• The bill as amended in committee: HL Bill 85

Report: June 25 2002 (The bill as amended on report: HL Bill 97

Third reading: July 11 2002

House of Commons

Consideration of Lords amendments: July 18 2002

House of Lords

Consideration of Commons reasons: July 22 2002

House of Commons

Consideration of Lords amendments: July 24 2002

Royal Assent: July 24 2002