Evidence published by the Commons Public Accounts Committee showed that Whitehall's organised fraud teams had recovered about half of the benefit cash stolen in the previous year - pounds 42m out of pounds 86m.
The frauds operated by making multiple claims with forged or stolen identity papers, and by counterfeiting or trafficking in order books.
Order books accounted for more than 60 per cent of the pounds 61bn paid out in 1991-92. The Department of Social Security estimated that books worth pounds 230m a year were going 'missing', and that an estimated pounds 100m was fraudulently encashed in 1992-93.
In that year, of 575 people prosecuted for organised fraud against the system, 556 were convicted and just 200 were jailed. Of that number, 100 were in southern England and just seven in Scotland, where 76 people were convicted.
The Commons select committee is expected to issue a condemnation of Whitehall's efforts to crack down on the organised fraud, following rough exchanges with Sir Michael Partridge, Permanent Secretary to the DSS, and Michael Bichard, chief executive of the Benefits Agency.
During those exchanges, the Whitehall machine was subjected to strong cross-party attack, mainly because the DSS's 23 organised fraud teams tended to work in isolation.
The National Audit Office told the committee that, while other private and public sector organisations it had visited 'made extensive use of centralised computer systems to provide intelligence data to aid fraud investigations', each of the DSS teams 'held their own data and could not easily gain access to other teams' information which might be relevant to their inquiries'.
There was also strong criticism of the department's failure to increase its allocation of resources for the work - even though 240 employees had recovered an average of nearly pounds 175,000 each.
The average cost of an employee was put at pounds 20,000, whereas the savings in London - the national hotbed for organised social security fraud - was put at pounds 350,000.
When Alan Williams, Labour MP for Swansea West, asked why more staff had not been diverted to such cost-effective work, he was told by a Treasury official that it was up to Sir Michael to decide how he allocated his resources within the department.
Sir Michael said the Treasury had agreed to increase the budget from pounds 6m to pounds 16m, but he told Mr Williams: 'There is a limit to which you can put more and more staff into that, and you cannot just do it on cost-effectiveness criteria, otherwise the size of the Civil Service would be twice what it is now.'
Mr Williams said: 'It might be an idea if you take some of the people you call scroungers out of the dole queues and give them jobs chasing the ones who are professionally pinching your money.'
Sir Michael admitted, in answer to a question from Michael Ancram, Conservative MP for Devizes, that there had been very little systematic or organised direction. However, Mr Bichard tried to reassure the MPs that he was tackling the problem of co-ordination between fraud teams, promising: 'What we are now able to produce in July of this year is co- ordinated guidance to all our staff.'
A spokeswoman for the Benefits Agency said that the guidance was still in 'draft' form and would not be printed and distributed until later this month.