Security giant G4S has been told it can bid for Government contracts again after it was suspended from the tendering process for overcharging on contracts for tagging criminals.

The FTSE 100 company and rival Serco were both found to have billed the taxpayer for tagging dead criminals, offenders who had been recalled to prison and others who had fled overseas.

G4S - well-known for its botched handling of its Olympics security contract - last month agreed a settlement of £108.9 million with the Government over the scandal.

The Cabinet Office has now accepted a turnaround plan put forward by the company and - as long as the plan is implemented - it will now be able to bid for future Government contracts.

However, the decision has no impact on an investigation opened by the Serious Fraud Office (SFO) into G4S and Serco's activities.

G4S chief executive Ashley Almanza said: "O ur UK renewal programme forms part of a wider programme of change to strengthen the governance and performance of the Group as a whole and, while significant progress has been made, much remains to be done.

"As part of our overall programme to strengthen the governance, management and performance of our UK Government business we have consolidated central government contracts into a single business unit under new leadership and enhanced contract management processes.

Our priorities now are to deliver outstanding service on existing contracts and to grow our business by competing for new Government services in areas where we have proven expertise and capability."