Mike German has denied any wrongodinng

The inquiry has been looking at documentation provided, including items from independent auditors who have examined the unit's books

No individuals have been named in the complaints to the police, but the European Unit was run by Mr German at the time, now the second most powerful man at the assembly.

Mr German has repeatedly denied any wrongdoing in the matter and has said his name will be cleared.

The assembly's First Minister Rhodri Morgan has so far made clear that Mr German would only have to step aside if the police decided there was a prima facie case to answer and the police took formal action against him.

On Wednesday a spokesman for Rhodri Morgan said nothing had changed with the news of a police inquiry.

The police were simply doing what they said they would - investigating a complaint submitted to them by the WJEC, the spokesman said.

As far as Mr Morgan was concerned, Mr German's role was unaffected.

However, opposition parties within the Welsh Assembly have already been calls for Mr German to stand aside during the inquiry.

Plaid Cymru Chairman Elin Jones said Mr German, the leader of the Welsh Democrats in the Assembly should resign.

Conservative AM Alun Cairns issued a statement saying they were calling on the First Minister to follow through previous commitments when he said that the Deputy First Minister should step aside while police investigate.

"We hope that the Deputy First Minister will be exonerated from any wrongdoing, but for the sake of the Assembly, I see few options other than him stepping aside to clear his name for the sake of the Assembly," said the statement.

Mr Morgan has so far not issued any statement about the police fraud inquiry.

Independent audit

In May, Mr Morgan said Mr German would not have to stand down in the wake of a controversial report into the European Unit of the WJEC.

The WJEC itself decided that allegations surrounding the use of exam board credit card and trips abroad will be referred to the police.

Last year, an independent audit of the unit by accountants PricewaterhouseCoopers said that the WJEC could be subject to a clawback of almost �430,000 by Europe.

But another independent review of the unit by auditors Bentley Jennison concluded that the WJEC could, in the event of an audit by the EU, have to pay back in excess of �1m.

It also points out discrepancies between comments made by Michael German and documentary evidence on file at the WJEC.