New £1 coins being deliberately damaged to sell on for thousands at auctions, Royal Mint believes

New £1 coins are being deliberately damaged so that they can be sold on for thousands of pounds to collectors, the Royal Mint believes.

Thousands of the 12-sided coins, introduced to help combat fakes, are currently in circulation with "major" flaws.

These blemishes include cracks, warps and holes - with the afflicted coins selling for up to £2,500 on eBay.

While the Royal Mint has already admitted that some of the 1.5 billion new £1 coins set to be struck will contain "variances", it has now told ITV News it believes much of the damaged currency is the result of deliberate sabotage.

In a statement to ITV News, a spokeswoman for the Royal Mint said: "As you would expect, we have tight quality controls in place, however we expect variances in a small number of coins, particularly in the striking process, due to the high volumes and speed of production."

The spokeswoman continued: "Unfortunately, we have observed a number of coins with separated and reversed inners and outers for sale on online auction sites.

"Our belief is that these have been deliberately manipulated and we would remind people that breaking up a UK coin is illegal under the Coinage Act 1971."

The Royal Mint added that the number of coins containing accidental errors was "extremely small" - and that they could still be used.

Introduced in late March, there will eventually be 1.5 billion of the new coins in circulation.

The “round pound” will stop being legal tender on October 15 this year, while the old paper £5 notes cease being legal tender this Friday 5 May.