A team of Brazilian bank robbers have been caught as they tunnelled into underground vaults in an attempted £250 million heist that "would have been the biggest in the world" if it had succeeded, police said.

A gang of 16 suspects were caught by police in Sao Paulo after they discovered a huge underground passage leading from underneath a nearby house to the government-owned Banco do Brazil.

The gang had already completed the tunnel to the edge of the vaults, but had not yet pulled off the robbery.

Police said the group spent nearly £1 million in renting a nearby property and digging out a vast and carefully constructed tunnel in the hope of making off with 1 billion Brazilian Real - nearly £250 million.

"It would have been the biggest heist in the world," investigator Fabio Pinheiro Lopes told local news outlets.

The state's Public Safety Department said that agents had been monitoring the gang for three months but only discovered the tunnel Monday.

Twelve years ago a different gang tunneled into a bank vault in Fortaleza and made away with $70 million in Brazilian reals.