The Metropolitan police has held talks with Palantir that could lead to the London force buying the US spy-tech company’s AI technology to automate intelligence analysis for criminal investigations, the Guardian has learned.

Palantir, whose software is used by Donald Trump’s ICE immigration enforcement programme and the Israeli military, demonstrated its systems to senior officers in the intelligence division at the UK’s largest police force last month. Intelligence staff have been tasked with finding intelligence systems that AI could automate to increase productivity.

The talks have created internal concerns about allowing a controversial US company to process highly sensitive intelligence data relating to crimes, such as victims’ personal information.

Palantir already supplies experimental AI to Scotland Yard aimed at detecting rogue officers, and there are internal expectations that the company is likely to be asked to significantly expand its role in what could be a multimillion pound contract.

The talks come amid rising public and political scrutiny of the rapid increase of Palantir’s public contracts with the NHS, Ministry of Defence, councils and smaller police forces. Those contracts are already valued at more than £500m in total.

Last week, MPs demanded ministers scrap NHS England’s £330m deal to handle patient and other health data because of anger at the company’s connections with Trump and the Israeli military and fears about patient privacy. Until recently Palantir paid Global Counsel, a consultancy co-founded by Peter Mandelson, for lobbying services.

This week, MPs redoubled calls for the government to review its Palantir contracts after the spy tech company published a manifesto on X extolling the benefits of US power and implying some cultures were inferior to others. Parliamentarians described the manifesto as “the ramblings of a super villain” and “a disturbing narcissistic rant”.

Palantir was co-founded by the billionaire Trump supporter Peter Thiel.

Smaller police forces, including Bedfordshire, are already using the company’s technology to help investigations and have praised its effectiveness. The reception for Palantir systems in the NHS has been patchier. The company has claimed its software has helped deliver 110,000 additional operations, as well as reductions in discharge delays, but some NHS staff have complained about the tools and several hospital trusts are not yet using them.

Palantir’s £240m contract with the MoD to deploy military AI systems for “strategic, tactical and live operational decision making” was signed after Mandelson took Keir Starmer to visit the company’s showroom in Washington DC last year. Mandelson was the UK ambassador to the US ay the time, but was later sacked over his association with the convicted child sex offender Jeffrey Epstein.

Some Met intelligence officials are understood to believe significant improvements in the way the London force handles intelligence data could be achieved without bringing in a big US contractor such as Palantir.

“We don’t need £100m AI,” a source said. “We would like the more basic systems we already have to work properly.”

The Met talks with Palantir come as the force explores ways to automate analysis of intelligence in a wide range of criminal activity and fast-moving emergency situations. Scotland Yard is understood to be heading quickly towards embracing AI automation in its intelligence units, and if a deal is confirmed it would represent a significant expansion in Palantir’s involvement in UK law enforcement.

In January, the home secretary, Shabana Mahmood, called for police to “ramp up use of AI” and to adopt the technology “at pace and scale”. A strategy for the future of policing includes creating a national centre, described by some as “Police.AI”, and a £115m investment to “create a platform for identifying, testing and then scaling AI technology”.

The government said it would result in more criminals caught, accelerated investigations, less red tape and a better service for victims and witnesses. Eleven smaller police forces in England and Wales have started using Palantir’s technology in investigations, but extending Palantir’s role to the Met, with its 46,000 officers and staff, would be a far larger undertaking.

With no deal confirmed, the Met declined to confirm or deny talks with Palantir. The company declined to comment.