A man has been arrested over claims that over 650 sheep were stolen in an alleged insurance fraud, before the animals were apparently found alive and well.

The City of London Police said the case centres on payouts of more than £28,000 from three insurance claims made within a year for the alleged theft of sheep.

Officers are investigating whether the thefts - from fields rented by a 24-year-old man in Devon - ever happened and whether the insurance claims were fraudulent.

A total of £28,220 was paid out in relation to two claims, while a third claim worth £64,800 was stopped following intervention by detectives and the insurance industry.

The force's Insurance Fraud Enforcement Department (IFED) arrested the man on suspicion of fraud by false representation and making or supplying articles for use in fraud.

Officers carried out searches at two residential addresses, a garage and two vehicles in South Molton on October 13 as part of the investigation.

They seized documentation linked to the case, along with a mobile phone, and also recovered two shotguns said to be in breach of licensing conditions.

During the operation, officers worked alongside veterinary professionals to check the welfare of the sheep and compare livestock numbers against records held by the Rural Payments Agency.

“The sheep were all found well and alive,” the force said.

Detective Constable Carley Parodi, of IFED, said: “Rural insurance fraud may be less common, but it can have a significant impact on insurers and genuine customers.

“Fraudulent claims distort the true picture of risk and can contribute to higher premiums for honest policyholders.

“We will continue to investigate these offences and take action against those who seek to profit through fraud.”

The investigation was launched after an insurer referred concerns to the Rural Crime Agency, which then passed the case to City of London Police.

Tim Passmore, chair of the National Rural Crime Network, said livestock insurance fraud increased costs for genuine policyholders and undermined efforts to tackle rural crime.

The arrested man has been released under investigation while inquiries continue.