THE Audit Commission has been called in to investigate how millions of pounds has gone missing from a troubled police force's budget.

Officials from the independent spending watchdog will examine how part of the shortfall - a "rolling committed cost" of £2.3m - was not spotted until this week.

Cleveland Police were planning to make cuts of £4.5m but Chief Constable Sean Price now has to find additional savings before a new budget can be prepared.

Last night, Mr Price pledged there would be no job losses but admitted plans to recruit 200 officers in the next year may be scrapped.

Details of the financial troubles were revealed yesterday by Middlesbrough mayor Ray Mallon, who described the situation as "deeply worrying".

Mr Mallon had previously supported Mr Price's proposal to increase the police element of council tax bills by 28.9 per cent - if the money was used on extra officers.

But yesterday, he withdrew his backing and was joined by Cleveland Police Authority chairman Ken Walker, who has called in the Audit Commission to investigate.

Mr Mallon said: "I am not prepared to support the public being asked to give a single penny more until I am satisfied that the resources currently available are being properly managed."

The Chief Constable said: "It was anticipated the cost of living increase, which had to be borne within the budget, would be around £2.5m.

"This is to take account of the increases in pensions, wages and essential growth. We had committed not to put any of that cost on the precept.

"Over the past week, in-depth examinations of the budget over several years have shown some rolling committed costs of £2.3m, which was unknown to the Chief Constable and the management team of the organisation. This brings our total required savings to £6.8m to enable us to achieve a standstill budget."

Councillor Walker, who resisted a call from Middlesbrough South and East Cleveland MP Ashok Kumar to resign over the fiasco, said new budget plans would have to be considered urgently.

He said: "It would be unacceptable, improper and irresponsible for us to proceed with the budget proposals we had been hoping to put forward in the knowledge that there is such a serious underlying financial issue which has to be resolved."

An urgent internal investigation is also under way, and the force's financial director is on leave while it is carried out.

Last night, Dr Kumar also withdrew his support for the planned precept rise and called for Home Secretary David Blunkett to intervene.