A DEPUTY chief constable arrested as part of a criminal inquiry said last night that police are to drop their investigation into his conduct.

Derek Bonnard, 49, was arrested in a dawn raid at his home in August last year after allegations of wrongdoing at the highest levels of Cleveland Police. He always protested his innocence and last night released a statement that he had been informed no further action was to be taken against him.

Mr Bonnard was arrested, along with Chief Constable Sean Price, as part of Operation Sacristy, conducted by Warwickshire Police, last year. Accusations, always denied by both men, included misuse of public funds and misuse of a corporate credit card. A file was passed to the Crown Prosecution Service earlier this month and now Mr Bonnard says the investigation against him has been dropped.

However, in a separate development, Cleveland Police Authority (CPA), announced yesterday that Mr Price and Mr Bonnard will face hearings into allegations of gross misconduct within the next two months.

The CPA announced it was to go ahead with the hearings after receiving a report from the Independent Police Complaints Commission (IPCC).

Mr Price faces 11 matters at the hearing. Seven will be deferred pending the outcome of the criminal investigation. Mr Bonnard faces seven, with two other matters deferred until Operation Sacristy reaches its conclusion.

CPA chairman Stuart Drummond said: “The criminal investigation involves a lot more people than the two senior officers. In fact, they are peripheral to some of the main criminal investigation.

“I am glad things are starting to come to a head with the misconduct accusations. It’s been frustrating, but eventually the public will see why this investigation has taken so long and cost so much money.”

In a statement, Mr Bonnard said: “I have been informed by Operation Sacristy that no further action will be taken in respect of any of the offences for which I was arrested on August 3 last year. My bail has been cancelled.

“My arrest was completely unjustified and the last year has been devastating for me and those that I love. I have done nothing wrong.”

Warwickshire Police confirmed that bail conditions against a 49-year-old man been dropped but did not confirm that the criminal investigation against Mr Bonnard had been abandoned. The bail conditions prohibited Mr Bonnard from contacting named persons or entering police premises. Both Mr Bonnard and Sean Price are suing police for what they claim was wrongful arrest.

Referring to the misconduct hearings, Mr Bonnard said: “I am extremely disappointed that a decision has been made to continue with the misconduct case which is based on identical allegations.”

The chief constable could not be contacted yesterday and his solicitor declined to comment.

Also arrested as part of Operation Sacristry last August was Cleveland Police’s former solicitor, Caroline Llewellyn.

Councillor Dave McLuckie, who stood down in May as the chairman of the police authority, was arrested in November.

A 42-year-old man, never identified, has also been arrested.

No charges have been brought and they all deny any wrongdoing.