The Metropolitan police are to take an expanded role in investigating the criminal allegations triggered by the Westminster betting scandal, which is continuing to overshadow the election campaign.

Sources confirmed to the Guardian that talks between the Gambling Commission, which has been investigating multiple suspicious bets on the election date, and Scotland Yard have been continuing for days.

A formal announcement is expected as soon as Thursday but exact details are still to be hammered out, with the row around the scandal engulfing Rishi Sunak’s election campaign showing no sign of abating.

A Scotland Yard spokesperson said: “The Met is not taking over the investigation into bets on the timing of the general election.

“The Gambling Commission will continue to lead the investigation into cases where the alleged offending is limited to breaches of the Gambling Act only.

“Met detectives will lead on investigating a small number of cases to assess whether the alleged offending goes beyond Gambling Act offences to include others, such as misconduct in public office.”

The Guardian uncovered the gambling scandal two weeks ago, revealing that Craig Williams was the subject of an investigation by the Gambling Commission for betting that the election would be in July, three days before it was called.

The watchdog is also examining bets allegedly placed by Tony Lee, the Conservative party’s campaigns director and his wife, Laura Saunders, the Tory candidate in Bristol North West, as well as Nick Mason, the Tories’ chief data officer.

The decision to drop Williams and Saunders on Tuesday was Sunak’s latest effort to draw a line under the gambling scandal that has dogged his election campaign.

The Guardian also revealed that Russell George, a Tory member of the Welsh parliament who represents the same constituency as Craig Williams, is part of the commission’s inquiry.

Six of the Met’s own officers have been caught up in the scandal so far, with one, a protection officer for the prime minister, under investigation for misconduct in public office having allegedly placed bets on the election date.

The Gambling Commission has the powers to investigate breaches of the Gambling Act 2005, under which placing a bet using confidential information is a criminal offence.

It is expected the Met will lead part of the criminal side, investigating the most serious potential criminal matters such as alleged misconduct in public office. The commission, however, is expected to retain primacy in the majority of cases, such as alleged straight breaches of the Gambling Act.

Labour was drawn into the gambling row for the first time on Tuesday as the party announced it was suspending the Central Suffolk and North Ipswich candidate Kevin Craig after the Gambling Commission launched an investigation.

Craig, a lobbyist and expert in political crisis management, confirmed that he was under investigation for betting that he would not win his own constituency.

Labour said it would return £100,000 he had donated to the party under Keir Starmer’s leadership, while the shadow health secretary, Wes Streeting, would give back £13,000 donated for staffing costs.

The Sun reported on Wednesday that Tory candidate Philip Davies had also bet against himself at the election, placing £8,000 on losing his marginal seat of Shipley.

There is no suggestion the veteran Tory, who is married to cabinet minister Esther McVey, has broken the law. However, he did not dispute the sum involved – instead telling the newspaper it was “nobody’s business”.