Australian police today dismissed claims the disappearance and suspected murder of British backpacker Peter Falconio was an insurance scam.

A police spokeswoman said the claims that Mr Falconio, who lived in Hove, had arranged his own disappearance to claim insurance money were similar to allegations made in an anonymous letter sent to police in February.

Denise Hurley of the Northern Territory Police said: "We have found nothing to suggest that it was a fraudulent act or an insurance scam."

Hurley said Northern Territory Police assistant commissioner Michael Daulby had discussed the matter with Mr Falconio's family and assured them detectives were still hunting for a man believed to have killed their son.

Mr Falconio, 28, of Hepworth, near Huddersfield, West Yorkshire, and girlfriend Joanne Lees, 27, of Almondbury, West Yorks, were tricked into stopping their camper van just outside Barrow Creek, a remote township 190 miles north of the central city of Alice Springs, and then attacked on July 14 last year.