A special enforcement agency is expected to be set up to identify and attack suspected criminals who lead lavish lifestyles but the police are unable to prosecute.
The initiative, expected to be announced by Jack Straw at the Labour Party conference, follows widespread frustration that criminals are using legitimate businesses and accounts to launder their illegally obtained wealth.
Nearly all the country's 150 most successful criminals are believed to have millions of pounds in off-shore bank accounts and sunk in country mansions, expensive cars. and yachts. Much of the money comes from drug dealing, counterfeiting and smuggling.
The National Criminal Intelligence Service (NCIS), aided by MI5, are expected to be used to collect evidence against suspects. The National Crime Squad, the Inland Revenue, and Customs and Excise would confiscate the assets.
Under the proposals, the police would be able to apply to the civil courts, asking them to decide if a suspected criminal's wealth had been earned honestly. If not, the court would be empowered to confiscate his assets. The courts would use the less searching measure of proof - "on the balance of probabilities" - rather than the "reasonable doubt" required in criminal courts.
To bring an action against a suspect the police would have to show the person had proven association with criminals or crimes.
The proposals, which would need a change in the law, are certain to be strongly opposed by civil liberties groups because it will undermine thelegal principle that suspects must be found guilty by a jury before they can be punished.
Officials from the Home Office and Treasury have been working on the proposals for several months and they are believed to have produced a number of options for the Home Secretary.
Last week John Abbott, director general of NCIS, called for the law on confiscation to be changed, arguing that such a move would allow his organisation to attack many of the 150 top criminals, most of whom use hired hands to do the dangerous work.
He gave the example of a drug dealer who moved from a council estate to owning several properties and cars and holding pounds 2m in foreign banks without ever taking on a job.
Earlier this year a report from Northumbria Police highlighted the case of an "untouchable" suspect living in a council house but owning three Porsche sports cars for which he had paid cash. The man had no visible means of support and surveillance had failed to prove positive links with crime.Reuse content