The Department for Education and Skills (DFES) called in police to investigate alleged fraud and theft involving ILAs after a tip off last week from a provider.
The ILA programme was to have been suspended from 7 December after ministers admitted the whole scheme had been open to fraud and mis-selling.
The DFES is investigating 270 training providers; and 30 people have been arrested following complaints made by the public to trading standards organisations across the UK.
The Government has admitted that it carried out only minimal checks on training companies that conned thousands of workers out of government grants in return for non-existent or poor quality IT training programmes.
News of the suspension raised fears that legitimate IT training programmes would be forced to close and that smaller employers would find it more difficult to train staff in IT skills.
Today's developments will compound that concern.
Poor checks to blame for IT training rip-off