The Sunday Times claims that, following the DTI commission of a report into the management of the club by insolvency expert Brendan Guilfoyle, secretary of state Patricia Hewitt referred the matter to the SFO and the police.
Guilfoyle said: “I will look at the conduct of current and past directors to see if they are fit to be directors.”
It’s thought the SFO will specifically probe the transfers of Robbie Fowler to Man City and Rio Ferdinand from West Ham in 2000.
Former Leeds United chairman Peter Ridsdale has revealed he will assist any investigation regarding his former club.
"I have no knowledge of this (investigation), nobody has spoken to me about it," said Ridsdale.
"I am more than happy to co-operate with any investigation. While I was there, it was run properly. I have no problem with that at all. That which I have knowledge of, was done properly."