Senior figures fear that the results of up to half a dozen constituency votes could be declared void — causing hurried by-elections — if prosecutors decide to make an example of the party. Criminal charges against key individuals are also possible.

At one stage 24 investigations were taking place into seats where the Tories were suspected of spending more on their campaign than the legal limit. It is believed that this has been reduced to fewer than a dozen investigations in which the police believe the evidence warrants further examination.

Yesterday a police source said that files were expected to be sent to the Crown Prosecution Service within weeks.

Key figures, including Nick Timothy, Theresa May’s chief of staff, have been dragged into the controversy even though they have not been accused of wrongdoing. Mr Timothy worked on the campaign in South Thanet, where the party stood against Nigel Farage.

Kent police said that there were nine members of staff within its economic crime unit investigating expenses.

Another police source said: “While there’s been a large number of investigations, it’s widely thought that they will make examples of one or two cases.”

It is understood that the paper trail involved in election expenses may make a prosecution easier than other fraud cases.

Ministers, aides and Tory MPs have all told The Times that the issue is high on the agenda inside No 10 and at Conservative headquarters. “The problem for No 10 is that they do not know where this will end and they do not know who is leaking against them,” a Tory source said. “They are deeply worried about this.”

The trouble began more than a year ago and hinges on whether Tory MPs in marginal seats broke election law that dictates what can be spent on “local” campaigning, which is distinct from the maximum parties can spend nationally.

An investigation by Channel 4 News appears to have uncovered receipts which show that the line between national and local spending has been blurred in South Thanet.

Craig Mackinlay, the successful Tory candidate, declared that he spent £14,838 but Channel 4 claims that spending on his local campaign was £33,989.

A subsequent investigation by the Daily Mirror suggested that 23 Tory MPs failed to declare spending on RoadTrip battlebuses as part of their local spending.” Five Tory battlebuses crossed the country to help certain candidates in the final stages of the campaign, and Conservative Campaign Headquarters (CCHQ) paid the bill. The total cost of this campaign has never been published, but the Mirror said that it had invoices indicating that it was more than £2,000 a day. A Conservative spokesman said: “All by-election spending has been correctly recorded in accordance with the law.”

On the battlebus, the spokesman for the party said: “CCHQ campaigned across the country for the return of a Conservative government. Such campaigning would be part of the national return, not local return, as the Electoral Commission has said. As is apparent from our national return, the party declared expenditure related to our CCHQ-organised battlebus.

“However, due to an administrative error it omitted to declare the accommodation costs of those using the vehicles. This is something we have already brought to the attention of the Electoral Commission in order to amend the return.”

One source close to No 10 said the subject was “occupying as much as 20 per cent of non-governing head space”.

/The Sunday Times/

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