03/06/2014 03:30 BST | Updated 03/06/2014 06:59 BST

Madeleine McCann 'Conman' Denies Misusing Public Donations For Search To Fund Lavish Style

UPDATE: Maddie Detectives Search Scrubland With Radar As Parents Prepare For 'Significant News'

A convicted fraudster who set up a firm to hunt for Madeleine McCann has denied allegations that he funded a lavish lifestyle using cash donated by the public.

Kevin Halligen has made the claims in a new documentary, in the week that police arrived in Portugal to excavate scrubland in Praia Da Luz near where Madeleine disappeared from a holiday apartment in May 2007 in a "significant new phase" of the investigation into why she vanished.

It has been claimed that he spent money for the search on first class travel, luxury hotel suites and a chauffeur.

His Washington-based company received around £300,000 from backers of Kate and Gerry McCann but his contract was terminated early and he was later convicted of fraud in the US on a separate matter.

The McCanns used Kevin Halligen's firm to look for their missing daughter

The McCanns used the Irish national's firm Oakley International for around six months to look for their missing daughter.

The £500,000 contract saw the firm hire private detectives, set up a hotline and process information.

But the McCanns terminated the arrangement without paying the full fees because Halligen, from Surrey, apparently failed to fulfill certain agreements.

In an interview for Channel 5 documentary The McCanns And The Conman, Halligen denied claims that he misused money raised to find Madeleine.

He said: "It is gross distortion of what was actually happening.

"The print media in particular took this line that really nothing was being done, I was living the high life on the proceeds of the McCann case.

"Trust me, I didn't buy so much as a new suit."

He added: "The money, all of it, is fully accountable."

Major Tim Craig-Harvey, a former Army officer who worked on the investigation with Halligen, said: "The gist of the story was that Halligen was a conman, that he had stolen funds, that nothing had been delivered and that the contract had been cancelled."

He added: "He went into, I think it was PNC bank in (Washington) DC and drew out a hundred thousand dollars at a time (and) stuffed it in his pocket.

"That was the last anyone saw of him."

But Halligen denied that he left the country without telling anybody.

"(I) didn't vanish. Everybody knew I was going to Rome," he insisted.

"It has also been reported that I was going to Rome for a holiday with this hot young lady. Untrue. This myth that I vanished off to Rome and spent everybody's money is exactly that, a myth."

Halligen pleaded guilty at an American court last year to defrauding Dutch company Trafigura of £1.3 million after claiming he needed funds to secure the release of two business executives who were arrested in the Ivory Coast.

He is said to have spent the cash on a lavish lifestyle, including a mansion in Virginia, US.

Halligen was arrested at Old Bank hotel in Oxford in 2009 where he was staying for several months under an assumed name and had run up a £5,000 bill.

The McCanns And The Conman airs tomorrow night at 9pm on Channel 5.

The hilly area that is due to be searched is being guarded day and night by armed local police with dogs, with officers expected to use ground-penetrating radar equipment to probe the ground, looking for disturbed earth.

The land, which is a few minutes' walk from the Ocean Club resort apartment where Madeleine was staying with her family, has been searched before.

Scotland Yard, which is carrying out its own investigation into what happened to the youngster, refused to comment on reports that British officers were at the scene and said the force was "not prepared to give a running commentary" about the case.