Dirty money seized from Saddam deals will be used to fight Mr Bigs

The money - part of the sum seized from the Weir Group under the Proceeds of Crime Act - is being made available to law enforcement agencies and the Crown Office.

It is the latest distribution of the cash taken from the engineering company, which was fined 3 million at the High Court in Edinburgh in December for paying illegal kickbacks to Saddam Hussein's regime to secure lucrative contracts.

The Glasgow-based company had already agreed to hand over its 13.9m profit from the business deals under a confiscation order. Another 1.5m has already been set aside to support water development and other humanitarian programmes, including a donation to the Linda Norgrove Foundation. A total of 100,000 will go to the fund, named for the 36-year-old Lewis aid worker killed last October during a botched rescue attempt after she was kidnapped by insurgents in Afghanistan.

The rest of the Weir Group money will be used for community projects in Scotland.

Mr MacAskill said about 24m had already been recovered this year through Proceeds of Crime legislation.

He added: "Fortunately the tide is well and truly turning against the gangsters and real progress is being made.

"I am pleased to announce that I am making 1.5m of that recovered cash available to our police and prosecutors to help them tighten the screw further on the thugs and gangsters who profit from the misery they bring to communities. These resources will be used by the agencies to maximise the benefits of the proceeds of crime legislation and take out the serious organised crime groups who bring so much harm to our communities."

Mr MacAskill made the announcement ahead of a visit with Gordon Meldrum, director-general of the Scottish Crime and Drug Enforcement Agency (SCDEA), to Gartcosh, where Scotland's first crime campus is being established.

Later today he is due to chair a meeting of the Serious Organised Crime Taskforce (SOCT) - the crime-fighting unit set up to ensure better co-ordination of law enforcement.

The taskforce has been credited with helping to set up new offences to tackle all levels of organised crime, such as directing, being involved, and failing to report such crimes.

In the past year, the SCDEA seized a total of 1.25m of "working cash" from organised criminals, a six-fold increase on the previous year.Strathclyde Police prevented an estimated 25m in contracts being awarded to firms with links to serious and organised crime thanks to agreements signed with their local authorities and other public and private sector bodies.

Last month Mr MacAskill announced that 3.65m from proceeds of crime would be invested in rugby club activities and facilities over the next three years. Scottish Rugby said it would direct 2.4m of that towards enhanced playing and coaching opportunities for youngsters.

The remaining 1.25m will be made available to local rugby clubs with a track record of growing the game at junior, youth and adult levels. The new fund will offer clubs up to 50,000 to invest in new facilities, or to improve existing ones.

In January, the government diverted 2.65m seized from criminals to basketball projects.