The Serious Fraud Office has begun a criminal investigation into the profit overstating debacle at Tesco, which resulted in the company overstating its profit expectations by £263 million.

The error is expected to have occurred as a result of financial executives including rebates which it hadn’t yet received from suppliers into its profits.

The supermarket says it has been "co-operating fully" with the SFO on the matter.

The investigation means that the previous probe by the Financial Conduct Authority (FCA) will be ended as the SFO takes over.