Verdict is another high-profile failure for force accused of seeking to make name for itself with prosecutions in world of sport

The Tottenham Hotspur manager Harry Redknapp walked out of Southwark crown court a free man on Wednesday, his path to becoming the next manager of the England football team apparently cleared, having been found innocent of two counts of tax evasion.

At 11.35am, within a packed and hushed court 1, Redknapp and his fellow defendant, the former Portsmouth football club owner Milan Mandaric, hugged in the glass-walled dock after the female jury foreman responded with quiet answers of "not guilty" to each count.

Outside the court, Redknapp told a forest of microphones that the nearly five-year investigation into his affairs had been "a nightmare". Looking exhausted rather than ebullient, he repeated a refrain from his two days of evidence: "This is a case which should never have come to court ? it's unbelievable."

Her Majesty's Revenue & Customs (HMRC), which prosecuted the case after the City of London police's investigation into alleged "corruption" in football, said in a statement that "we have no regrets about pursuing the case", but both organisations will face criticism following lengthy, expensive forays into the national sport that generated huge publicity but no solid result.

The rawest episode in the 13-day trial had come when Redknapp was discussing why a total of $295,000 (?186,000) was paid into a Monaco bank account named after his pet bulldog Rosie. Breaking off from his evidence, the Tottenham manager suddenly snarled at a thin and greying man sitting behind the prosecution. "Mr Manley," Redknapp glowered, his face crimson, "will you please stop staring at me. I know you are trying to cause me a problem. OK? Police officer?"

Redknapp's outburst demonstrated the resentment held by this totemic figure in English football towards the City of London police, a force that has been accused of seeking to make a name for itself with high-profile prosecutions in sport. The confrontation cut through the tortuous ins and outs of whether the Monaco payments were a bonus from Mandaric, Redknapp's former employer at Portsmouth, on which tax and national insurance were illegally evaded, or rather, were so-called "seed money" to be used for private investment purposes and from which Redknapp, as a gesture of friendship by Mandaric, would keep any profits.

The co-defendants repeatedly claimed the latter was true, and therefore the payments were not subject to employment taxes. Detective Inspector Dave Manley ran Operation Apprentice, the City of London police investigation into corruption in football, which featured heavily manned dawn raids on a range of football figures including Redknapp, all of whom bitterly protested about their treatment.

If the stakes at Southwark were profound for Redknapp ? determining whether he would continue his arc as his generation's most successful English football manager to a likely elevation of running the national team, or leave the dock a criminal ? they were high, too, for Manley.

The City of London police is the UK's lead force for financial crime, a status some experts describe as its justification for remaining independent of Greater London's Metropolitan police. The force is part-funded by the banks in the City's square mile: ?4.9m in 2010-11 came from its police authority, the Corporation of London.

Throughout the serial collapse of banks around it, which have cost the taxpayer trillions, the City of London police has arrested no senior banker for any suspected offence. Over a similar period, though, the force has become expensively involved in horse-racing and football.

In December 2007, the trial of the former champion jockey Kieren Fallon and five other men for alleged race-fixing collapsed. Their lawyers accused the City of London police of a flawed investigation.

By then, Operation Apprentice was well under way, and had been reported broadly, after a series of sensational raids. It crossed over an inquiry by the investigation company Quest, commissioned in January 2006 by the Premier League itself, into alleged "bungs" ? kickbacks to football managers from agents as thank-yous for signing their players. Bungs had long been rumoured to be routine in the game, most famously during a court case between the former Tottenham Hotspur chairman Alan Sugar and the club's then manager, Terry Venables. During a discussion about the possible transfer of the Nottingham Forest striker Teddy Sheringham, Sugar said in court that Venables had informed him that Forest's legendary manager Brian Clough "likes a bung".

If proven, the payment of bungs would constitute a serious corrupting of football's integrity, which relies on managers recruiting players on their sporting merits. So when the police raids were carried out, including at Redknapp's house by around 30 officers at 6am on 29 November 2007 ? when, as he bitterly recalled in court, only his "terrified" wife was in and a photographer from the Sun happened to be on hand ? the police investigation was assumed to be a forceful follow-up to intelligence about bungs.

Dawn raids

However, as Redknapp's successful 2008 challenge to the legality of the search warrant later revealed, Operation Apprentice was not related to bungs at all. The offices of Portsmouth, Glasgow Rangers and Newcastle United were also raided, attended by huge publicity.

Mandaric was arrested, as was Peter Storrie, the former Portsmouth chief executive, the football agent Willie McKay (who says he now intends to sue the City of London police), and David Sullivan and Karren Brady, then the owner and managing director respectively of Birmingham City.

Two Premier League players, the midfielder Amdy Faye and full-back Pascal Chimbonda, formerly of Portsmouth and Tottenham Hotspur respectively, were also arrested.

In fact, the City of London police investigation centred not on bungs but on what the force has said was alleged money-laundering. Ultimately it focused on relatively small amounts of allegedly unpaid tax ? namely, whether Portsmouth had paid Faye a fee when he signed for Portsmouth in 2003, disguised it by routing it through McKay, and therefore evaded tax and national insurance due on it.

Neither Faye nor McKay were ultimately charged with any offence, and Sullivan, Brady and Chimbonda were cleared of any wrongdoing.

With Redknapp's and Mandaric's trial now over, it can be revealed that as a result of Operation Apprentice, Storrie was prosecuted, charged with cheating the public revenue in relation to the alleged payment to Faye, and that he and Mandaric were also tried for tax evasion over an alleged termination fee paid to the midfielder Eyal Berkovic via a company, Medellin Enterprises, registered in the British Virgin Islands.

After a six-week trial, also at Southwark crown court, in two hours on 20 October 2011 the jury found both men not guilty. That was why Redknapp, during his trial, spat out contemptuously that Manley's investigation had produced "absolutely nothing".

Yet a central twist runs through the reeling of Redknapp into the criminal dock while at the pinnacle of his 47-year football career ? riding high in the Premier League with a reborn Tottenham Hotspur, and widely tippe
d to become the next England manager once Fabio Capello's controversial reign ends.

Operation Apprentice produced no charge against him. In 2009, however, the City of London police turned to Redknapp's Monaco bank account which, as his barrister, John Kelsey-Fry QC, repeatedly emphasised, Redknapp himself had volunteered to the Premier League's Quest investigation. The News of the World reporter Rob Beasley found out about the account with the password Rosie47 ? admitting he paid ?8,000 to his source, unidentified, for the story. Beasley called Redknapp to explain the account. He said the money in it was "a bonus", and as it came from his employer, not an agent, that proved the payment could not be a bung. But this explanation, given by Redknapp to prove he had not committed a football manager's most heinous act, landed him and Mandaric in it, with charges of failing to pay tax. Redknapp was "condemned in his own words", the prosecution's John Black QC argued to the jury, describing Beasley's recording of his interview with Redknapp as the case's most "important and compelling evidence".

However, this evidence may have appeared stronger to the City of London police, HMRC and the Crown Prosecution Service when they first brought the charges than it did during the case, coming after revelations of phone-hacking and News Corporation's closure of the News of the World, which allowed Redknapp to continually express scorn and retort that he "did not have to tell the truth" to "that newspaper".

Black used the word "bung" several times during the case to describe the $145,000 Mandaric paid into Redknapp's Monaco account in 2002, and the further April 2004 payment of $150,000. That generated headlines but was also inaccurate, as Redknapp and Mandaric explained.

Both football men demonstrated in their evidence that they know exactly what a bung is, and, emphatically, that this was not it. Redknapp, so scatter-brained, he claimed, about his personal finances, provided a very precise definition of a bung: "Money paid to chief executives or managers," he said, "as an inducement for a transfer ? corruption."

Rumours of bungs

Mandaric, in his own long and largely unruffled evidence, described bungs as "illicit payments by agents, to managers and club officials, to act against the best interests of the club". And that, Redknapp told the court, was what he was at pains to deny to Beasley. "I said it's got nothing to do with a bung," he explained. "It was paid by the chairman."

Stories have swirled for years that bungs were commonplace in a national sport that has been drowning in cash since the breakaway by first division clubs to form the Premier League, in 1992. The league itself set up the Quest inquiry in 2006, after agents themselves, including Jon Holmes, one of the first and most respected, described football's player transfer business as "like the wild west".

Mike Newell, then Luton Town's manager, said publicly that bungs were rife. The former England manager, Sven Goran-Eriksson, was caught in a News of the World fake sheikh sting on a yacht saying, among several other indiscretions, that Premier League managers "put money in their pockets".

The claims had credence, because even before the billions from Sky TV and the Premier League's commercial revolution, bungs were indeed proved to have been paid.

A previous Premier League inquiry, signed off in 1997 by Robert Reid QC and the league's then chief executive, Rick Parry, had found that after Arsenal signed the Danish midfield international John Jensen, and the Norwegian full-back Pal Lydersen in 1991 and 1992, Arsenal's manager, George Graham, had been paid ?425,000 in kickbacks by the players' Norwegian agent, Rune Hauge.

They also concluded that ?50,000 in cash was handed to Ronnie Fenton, Brian Clough's assistant at Nottingham Forest, after Clough sold Teddy Sheringham to Tottenham Hotspur in August 1992. Graham was sacked as Arsenal's manager and suspended from football for a year. Clough and Fenton were charged by the Football Association with misconduct for other alleged transfer kickbacks, but Clough was spared due to his deteriorating health, and Fenton retired to Malta.

The subsequent Quest investigation was tasked with examining all 362 transfers of players in and out of Premier League clubs between January 2004 and 2006, "specifically to identify ? unauthorised or fraudulent payments". It produced a report in June 2007 that named some high-profile football agents for alleged lack of co-operation and said 17 of the deals could not be "signed off" ? but closely read, the Premier League's report exonerated every manager and club official of taking bungs.

There again, Redknapp's revelation in court that "quite a few" managers did not volunteer their bank details to Quest as he did ? including, fatefully, his Monaco account ? placed the rigour of the Premier League's self-inquiry into a new perspective.

Redknapp's trial highlighted his earnings when managing Portsmouth, a smaller Premier League club bankrolled by the Serbian-American millionaire Mandaric eight years ago. For keeping Portsmouth in the Premier League in 2004, Redknapp was paid, on top of his ?800,000 salary, a ?500,000 bonus plus 10% of the club's merit payment (a share of TV money) for finishing 13th ? another ?436,000. Altogether, that made ?1.736m.

Denying he was greedy and saying it was "a point of principle", Redknapp also believed that, in 2002, he should have received a 10% bonus for the ?4.5m sale of the striker Peter Crouch to Aston Villa ? not merely the 5%, or ?115,473, that he was entitled to as part of his contract with Portsmouth.

Redknapp said in court that, "in my mind", the further bonus was what the first lump of Monaco money was for. But both he and Mandaric also said he was not contractually entitled to it, and that this initial $145,000, paid into the Monaco account, was for investment, and so not part of his employment. The further $150,000 was, Mandaric said, to replace $100,000 that had been invested and lost, and to give Redknapp a $50,000 "nominal profit".

The City of London police will not disclose how much their investigation into "corruption in football" has cost. Both Redknapp's and Mandaric's legal teams, who accuse the police of publicity-seeking in the manner of their investigation, said they have put in freedom of information requests to find out, which have not so far been answered conclusively.

In a statement, the force said: "It was clear from the outset of this inquiry it was a high-profile case that could attract criticism of the force. This did not deter the force from taking the case on."

HMRC said its counsel fees alone, for Black and his juniors in both prosecutions ? the second, featuring Redknapp and Mandaric, for around ?70,000 in allegedly evaded tax and national insurance ? were, to the end of 2011, ?944,000.

It also remains the case, following Quest and DI Manley's Operation Apprentice, which a City of London police spokesman confirmed is closed, that in 20 years of the multibillion-pound Premier League, and despite all the stories, rumours and investigations, Harry Redknapp is an innocent man, and no authority has proved any football manager ever took a bung.

Talking points

Portsmouth FC

Milan Mandaric said his close relations with Harry Redknapp had grown beyond their professional relationship at Portsmouth, which he owned, and which Redknapp began to manage in 2002. In court, Mandaric described Redknapp as "a moaner", saying he "loved Harry to bits", but

added that Redknapp would complain stubbornly about a grievance when

he felt he had one.

Peter Crouch

Mandaric was not bowled over by Crouch's talents, apparently telling Redknapp: "If this is the best you can do, you will end up paying me money." The 6ft 7in striker confounded his critics, and was eventually sold to Aston Villa for a ?3m profit, triggering a bonus for Redknapp
.

Rosie

Redknapp chose to give his

his Monaco bank account the password Rosie47 after his beloved pet bulldog. The last two characters of the name are an abbreviation of 1947, the year of Redknapp's birth. Mandaric told the court he had met Rosie several times and saw nothing unusual in naming a bank account after a dog.

Monaco

Redknapp told the court he had opened the Rosie47 account there to receive a payment from Mandaric of $145,000 (?93,000). A second deposit of $150,000 was later paid in by Mandaric.

HSBC

Redknapp banked at HSBC in Britain and in Monaco, but didn't tell his UK personal banker, Alan Hills, about Monaco for almost six years. Hills told the trial that despite a gift for property deals, Redknapp had been involved in some "very unsuccessful" investments.

Oxford United

Redknapp admitted losing ?250,000 in an attempt to help his friend Jim Smith keep his managerial job. A US takeover bid fell through and Redknapp never saw his money again.