MP Jim McMahon has referred the collapse of failed free schools Collective Spirit in Oldham and Manchester Creative Studio to the Serious Fraud Office (SFO).

The Oldham West and Royton MP wants a criminal investigation into £2 million of missing cash.

Already,there are "serious doubts" over the ligitimacy of £363,159 of "undeclared payments".

Collective Spirit closed in 2017 and the Manchester school followed suit a year later, with rolls falling and large deficits, against a backdrop of damning Ofsted reports warning of wholesale failings in education, safeguarding and provision.

The MP's call has also been echoed by joint general secretaries of the National Education Union, Mary Bousted and Kevin Courtney.

Mr McMahon said: "My office has contacted the SFO about the alleged wrongdoings at both schools, and this has been followed up by a formal referral and a request for a full criminal investigation."

He said that following the publication of the Education and Skills Funding Agency's investigation report into the activities of the two schools "many questions remain unanswered, parents and pupils remain without justice, and the taxpayer remains unaware of the true scale of these alleged fraudulent activities".

Mr McMahon continued: "I have asked that payments exceeding £2 million are reviewed, along with each of the associated trading companies and any undeclared related companies.

"Only an investigation by the SFO can unearth the scale of the alleged fraud in order to repair public trust and rebalance the injustice felt by parents and former pupils."

Further allegations have come to light over an alleged VAT fraud at the Manchester Creative Studio School in which a false VAT number was used when billing Oldham Council for consultancy services.

According to the educational publication Schools Week, Alun Morgan was the sole listed director of Morgan Bristol Ltd and chair of governors at the Manchester school.

It said Morgan's company was paid more than £220,000 by Oldham Council for procurement and ICT services over two years. The firm never filed accounts and has been struck off by Companies House.

Oldham Council has said that use of the false VAT number was reported to HMRC. Morgan Bristol was paid almost £30,000 in VAT, which was to be paid to HMRC.

A government investigation published in May concluded that Mr Morgan breached the Companies Act over payments of more than £500,000 from the schools to the Collective Spirit Community Trust, a company in which he had a 50 per cent holding, and which had "unclear" links to its former chief executive Raja Miah.

A Schools Week probe in November revealed the two schools were paid more than £2 million to multiple companies linked to Mr Miah. Morgan also had ties to some of the companies.

It further transpires that Mr Morgan was employed by Oldham Council from April 1, 2017 as interim had of strategic relationship management and was promoted to assistant commercial director in June.

Just weeks later, Oldham town hall bosses received an anonymous whistleblower allegation about financial mismanagement at the Manchester schools, triggering an investigation into Mr Morgan's activities. He was suspended on August 3, and the following day he resigned.

Both Mr Miah and Mr Morgan were unavailable for comment.

Oldham Council says it has now introduced stricter processes around the checking of VAT numbers and will take action against any employees who do not follow contract procedure rules.

According to Schools Week, the government has secretly blacklisted Mr Morgan, Mr Miah and chair of governors Mohib Uddin from running schools.