MADELEINE McCann's parents suffered fresh heartache last night after claims their missing daughter was in Paraguay were dismissed by police.

Detectives instead launched an investigation into the Brit private eye who had claimed the youngster was living 'in custody of a woman' in the South American country. 

Miraz Ullah Ali sparked a hunt after flying 6,000 miles from the UK to Paraguay to place an ad in a large circulation newspaper urging locals to look out for the missing girl who would now be 12.
 

He claimed he had 'information' that Madeleine 'arrived in Paraguay a month or two ago' and was living in the city of Aregua.

The private eye offered a 2million Euro reward for information leading to her safe return which he insisted was backed by a consortium of wealthy well-wishers. 

Suspicious newspaper bosses tipped off police. 

But as detectives began looking into Ali's claims the focus of their inquiries soon shifted from a search for the youngster to the background of the private eye. 

Madeleine's parents Kate and Gerry said they had never heard of him.

A phone number he urged people with information to call went directly to the Metropolitan Police's Operation Grange team probing Madeleine's disappearance. 

But Ali has no link to the Met investigation.

Last night Paraguayan immigration officials and Interpol were investigating him.

A source close to the McCanns said: "Kate and Gerry have had their hopes raised and dashed so many times.

"They are pleased that Madeleine is still in people's minds." 

A Met Police spokesman said they were 'making inquiries'.