Millions of pounds have been lost due to a dramatic rise in construction fraud triggered by the credit crunch, according to a report released by Kroll.

The annual Kroll Global Fraud report found that the average loss to fraud for firms has increased by 69%, driven by tough economic conditions.

Over the past three years, companies lost an average of £7.9m, and last year they lost an average of £2.5m.

A total of 890 senior executives participated in the worldwide survey, which covered 10 industries, with just over one-quarter based in Europe.

More than 95% of the construction firms surveyed said they had suffered from corporate fraud in the past three years – up by 77% from last year's survey.