National Lottery operator Camelot has been fined £3million over allegations it paid out on a fraudulently claimed prize that cost good causes £2.5million.

An investigation was launched last year after it emerged a 'winning' ticket may have been wrongly paid out in 2009.

In an announcement today, the Gambling Commission said it was 'more likely than not' the incident took place and imposed the huge fine as punishment.

Camelot, which is based in Tolpits Lane, said the incident related to a single 'deliberately damaged ticket' in 'unique' circumstances that could not be repeated today.

A police investigation has been completed and 'no further action' will be taken.

The Gambling Commission found Camelot breached the terms of its operating licence in three different ways - controls on its databases, the way it investigated prize claims and how it decides to award prizes.

The firm reported the incident to the Gambling Commission in October 2015, seven years after it occurred.

Andy Duncan, CEO of Camelot, said: "It's really important that people understand that this allegation relates to a unique, one-off incident dating back to 2009 and involves a potentially fraudulent claim on a deliberately damaged ticket.

"It has nothing to do with The National Lottery draws themselves.

"We accept that, at the time, there were some weaknesses in some of the specific controls relevant to this incident and we're very sorry for that.

"We've strengthened our processes significantly since 2009 and are completely confident that an incident of this nature could not happen today.

"We welcome the Gambling Commission's confirmation that this is the case."