Fixing the figures

China's Xinhua state news agency said that the Hanxin digital signal processing chips were not based on research carried out by Mr Chen.

Nor could the chips carry out the functions, such as reading fingerprints or playing MP3 files, that they were supposed to, it reported.

Mr Chen would now have to pay back state funding, Xinhua quoted the Science and Technology Ministry, and the State Development and Reform Commission as saying.

The Financial Times estimated that Mr Chen and his team had received funding worth some 114m yuan (£7.5m).

China has increased investment in research because it wants to produce its own commercial technologies rather than buy them in from abroad.

It has laid out long-term plans to boost spending in a number of areas including genetics, nuclear power and agriculture.

Wait and see

Mr Chen's work on chips was seen as a shining example of what could be possible when academia mixed with business. He also was general manager of Hanxin Sci-Tec, the company that produced the computer chips.

However, an investigation was launched after authorities received a letter questioning the validity of Mr Chen's work.

Mr Chen has now been banned from conducting further state-funded research.

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"If there is a criminal investigation we will announce it," a spokesman from the Shanghai city government's news office told the Agence France Presse news agency. "But as of now, there's no such information."