The judgment setting out the reasons for Harry Redknapp's court victory against City of London police last week appears to confirm that the police inquiry into alleged football corruption is actually investigating suspected tax fraud.

It has been widely assumed that the police must be investigating if bungs have been paid by agents to managers, but the judgment seems to confirm what Birmingham City's joint-chairman David Sullivan said following his arrest last month, that the inquiry centres instead on payments allegedly made by the agent Willie McKay to his own players.

Sullivan said then that the questions concerned whether the correct tax had been paid and derided the investigation as "a huge waste of police time and money". The judgment also confirms that, as first reported in this newspaper's Digger column last December, City of London police began its inquiry with information received from the authorities in France.

The judgment, by Lord Justice Latham, said City of London police began its investigation into "suspected conspiracy to defraud, false accounting and money laundering offences" in 2006.

"It was suspected that [Harry Redknapp] as manager [of Portsmouth], together with the managing director Peter Storrie and the club's then owner and chairman Milan Mandaric, may have conspired together to make disguised payments to a player, [the former Portsmouth midfielder] Amdy Faye, using the agent William McKay to receive payments offshore," the judgment says. "These inquiries have been stimulated by information obtained from the French authorities."

Redknapp, Storrie, Mandaric and Faye all deny any wrongdoing.

Redknapp won his claim in the high court last week, that the warrant obtained by City of London police to search his home last November was unlawful. He had complained that the police raid on his house at 6am was unnecessarily heavy-handed, and said he had volunteered full cooperation to the police. He was also aggrieved that photographers were in tow, whose pictures of the raid appeared in the Sun the following morning.

Lord Justice Latham found that the search warrant was unlawful because the police had failed to specify to the magistrates issuing the warrant why they needed it. One legal reason for issuing a search warrant is that a suspect is likely not to cooperate or will refuse access, but City of London police had failed to specify any reasons for needing the warrant. In fact, according to the judgment, Redknapp had made it clear in letters from his solicitor that he was prepared to co-operate. The judge described the police failures to lawfully obtain a warrant as "wholly unacceptable".

City of London police also arrested as part of the investigation another player whose transfer McKay negotiated, the Tottenham full-back

Pascal Chimbonda, as well as the Birmingham City managing director Karren Brady, Sullivan and an unnamed 61-year-old accountant. McKay declined to comment yesterday but has consistently denied any wrongdoing, as have Chimbonda, Sullivan and Brady.

City of London police said that it is reviewing procedures following the

ruling that the search warrant was unlawful, but added that the investigation has been unaffected.