Kevin Halligen, 56, dubbed a “cloak-and-dagger, James Bond-style spy”, took the high-profile case in March 2008.

And while Halligen was hired by the McCanns he was involved in a dispute and accused of conning the fund to find their daughter by living a lavish lifestyle during his probe, but producing no results.

It was claimed he took up to £300,000 ($520,000) before his contract was terminated.

But mystery now surrounds his death, with police launching an investigation.

A former colleague told MailOnline: “The house was covered in blood but apparently that was from Kevin falling down so much.

“His body is now in the morgue.

“The police are looking into it.”

His death is being treated as unexplained but a source who knew the Dublin-born debt-ridden private eye say he was “a boozer” and “drink was inevitably his downfall”.

Former doctor Kate, 49, now a medical worker previously told how the family had suffered “a particularly bad experience” with Halligen, who she knew as Richard.

She described the ordeal he put them through in her bestseller 2011 book Madeleine.

Halligen was CEO of private investigators Oakley International when he was hired by the McCanns.

Kate recalled: “Oakley’s proposal and overall strategy were streets ahead of all the others we’d considered and the company came highly recommended.”

Initially Kate and heart doctor Gerry, 49, from Rothley, Leicestershire, were impressed with Halligen’s work with Kate writing: “There is little doubt that progress was being made.”

But the couple later started to have grave concerns and decided to terminate his £500,000 ($870,000) contract in September 2008.

Kate recalled: “It was quite acrimonious and unfortunately that was not the end of it.”

Several months later investigators subcontracted by Halligen came forward demanding payment for his services which they hadn’t received.

Kate said: “We were upset that, although a lot of hard work had been done on Madeleine’s behalf, it seemed money provided by her fund might not ever have reached the people who had earned it.”

In November 2009 The McCann’s found out Halligen had been arrested on suspicion of fraud after a discrepancy in a hotel bill.

A close pal of Maddie’s parents said: “The man was a fantasist. He promised lots of things that never happened.

“He even claimed McCann spoke Clarence Mitchell was working for MI5!

“Kate and Gerry and Madeleine’s great uncle Brian Kennedy, who had brought him on board, were bitterly disappointed with him towards the end of his contract.

“They didn’t need the extra grief, they already had enough.

“In the end they took issue and had to withhold his final payment.

“He just ran away from his debts around the world.

“Maddie’s parents cling onto a glimmer of hope their eldest child — who would now be aged 14 — could still be alive.”

THE McCANN’S PRIVATE INVESTIGATORS

KATE and Gerry McCann hired four different firms of private eyes over four years before Op Grange was launched in May 2011 to the cost of the British taxpayer.

Firstly they employed Control Risks Group in May 2007 shortly after Maddie vanished.

They hired Spaniards Metodo 3 in October 2007 but sacked them when M3 boss Francisco boasted: “Madeleine will be home by Christmas.”

Next came private investigators Oakley International, an A-team of former British special forces soldiers and US security agents run by Brit Kevin Halligen, from March to September 2008.

But they were ditched when Halligen was later exposed as a conman.

He is alleged to have fleeced the Maddie Fund out of £150,000 ($260,000) with bogus invoices and inflated expenses.

A fourth team helping out after Portuguese police shelved their investigation in summer 2008 were Alpha Investigations run by ex-RUC officer David Edgar and former Merseyside detective Arthur Cowley.

But they stepped down after nearly three years when the Met Police came on board.

This article originally appeared on The Sun.