Ministers have claimed success in stripping criminals of their ill-gotten gains.

Home secretary Charles Clarke has announced the recovery of more than £120 million in cash and goods from some of the UK's most prolific criminals.

The news came on the second anniversary of the Proceeds of Crime Act, which Clarke said was stripping criminals of over £1 million a week.

The government also announced that from next year all agencies involved in recovery operations can keep half of the assets to re-cycle in the fight against crime.

Police, Customs and Excise, the Crown Prosecution Service, the Department for Constitutional Affairs and the Assets Recovery Agency will benefit financially from the move.

"Tough powers introduced in the Proceeds of Crime Act are really starting to bite, making it harder for criminals to hold on to the profits of their illegal activities, as law enforcement agencies strip criminals of their assets with escalating success," said the home secretary.

"More than £120 million that would otherwise be funding criminal activity has been seized in the last two years under previous legislation and the Proceeds of Crime Act powers, with another increase expected next year.

"Police forces across the country are already benefiting from the incentivisation scheme set up by the Home Office. This year they will receive more than £13 million 'cash back' as a reward for their work recovering criminal assets."

Attorney General Lord Goldsmith said prosecutors were playing a key role in the recovery of criminal assets.

"Since the Act was implemented, prosecutors' skills on confiscation work have developed significantly, and prosecutors increasingly use the range of powerful tools available - restraint orders, robust prosecutions, confiscation orders," he said.

"We must continue to hit criminals where it hurts most - in the pocket."