Spanish police have seized 2.5 million euros of counterfeit notes, the biggest haul in the country since the single currency was introduced three years ago. During the dawn raids on Tuesday, 27 people were arrested, all of them Spaniards except for one Moroccan and one Uruguayan.

The operation took place near Madrid and in three other regions including Catalonia.

Police found two printing presses being used in a villa and a caravan in the Madrid region. They also seized 16 guns, a kilogram of hashish and four luxury vehicles.

The suspects allegedly produced nearly half of all the false euro notes detected in Spain in 2004. There has only been one larger haul in Europe. Last year, 11 men were charged in Lithuania after police seized forged banknotes worth at least 9 million euros.

PHOTO CAPTION

A suspect is led from a court by Spanish policeman in Marbella, southern Spain March 14, 2005. Spanish police have cracked a money-laundering operation worth up to 250 million euros. (REUTERS)