Almost 40 benefit cheats in the borough are alleged to have stolen half a million pounds of taxpayers' money and are waiting to be dealt by the courts.

The Department of Work and Pensions has issued a warning to those abusing the benefit system that it intends to catch them and make them pay.

The most common type of benefit theft in South Tyneside is working while claiming, accounting for 38 per cent of cases.

It is followed by people hiding savings (28 per cent) and pretending to be single (20 per cent).

Anti-fraud Minister Tony McNulty said the credit crunch is no excuse for people looking to bolster their bank accounts by committing benefit fraud.

He said: "Benefit thieves have to understand that they will not get away with it. No one can expect to come up with an excuse for benefit theft. We've heard them all before.

"Those committing benefit theft don't just face the possibility of a criminal record and a jail sentence. Their crime can also impact on future employment, insurance and credit applications.

"The public strongly support our crackdown on benefit thieves because they steal money which is meant for the most vulnerable in society. Last year, they stole about £0.8bn – money that could be spent on schools and hospitals.

"We will make sure they pay back the money they have stolen from the taxpayer and seek to ensure any proceeds from their crime are confiscated too."

If people suspect benefit fraud, they can report it free and anonymously to the national benefit fraud hotline on 0800 854 440.