Tesco is facing action from the UK Border Agency after a raid on its dotcom warehouse in Croydon allegedly found it was illegally employing foreign students.

The retailer has admitted employing a group of around 20 students, from almost a dozen different countries, who were working longer hours than their visas allowed.

Tesco told The Grocer it had fully co-operated with an agency investigation into the offences, which resulted in a raid at the London borough location last month.

This afternoon the Daily Telegraph said the retailer could be facing “huge fines” over the revelation. But Tesco said it had worked with the agency – even allowing the students to be continued to be employed once suspicions had been raised, so they could be caught in the act.

“In cooperation with Tesco, the UK Border Agency visited our dotcom store in Croydon in July,” said a spokesman for the supermarket.

“As a result of this visit, a small number of staff were found to have breached the terms of their working visas.

“We continue to cooperate fully with the UK Border Agency as they look into this issue. We take our responsibilities as an employer very seriously and do not condone illegal working of any kind.”

He added: “We have a comprehensive system for ensuring all the correct procedures are followed in this area, which has been externally audited and generally works well. We have now taken additional steps to ensure an incident of this nature does not happen again.”