The unidentified man was found to be carrying the substantial sum of money when officers arrested him in Nottingham city centre on an unrelated matter on February 4, but they were forced to let him keep the cash when they could find no evidence to prove he had obtained it illegally.
Nottinghamshire Police now fears the man could be one of 10 'hardcore' beggars operating in the city, none of who are thought to be genuinely homeless or in need of help.
Police officers originally arrested the unidentified man last week after he failed to turn up at Lincolnshire Court on an unrelated matter.
Upon searching him they discovered a haul of £800 in notes and coins in his pockets.
Police said that although the man is well known as a prolific beggar, they were forced to hand the money back to him as he had been arrested for something else and it could not be proven that he had broken any law in obtaining it. The man was later released without charge.
A police spokeswoman told MailOnline: 'As far as we know the man isn't actually homeless. He is just sitting shivering and people feel sorry for him. If he doesn't actually ask for money, he hasn't broken the law.'
She added: 'People will just feel sorry for him and say 'here's a tenner mate'. That's what we believe to be happening'.
'The money may have been taken away for safe-keeping after his arrest but it will definitely be handed back to him, if it hasn't been already,' she went on to say.
Officers say the large sum of money suggests the man may be one of a group of all-British 'hardcore' beggars they fear are operating in the city.
Speaking to the Nottingham Post, Chief Inspector Shaun Ostle of Nottinghamshire Police said: 'This shows they are basically conning people. He said it was three days' work. Finding that amount of money on someone like that doesn't surprise us any more – which is perhaps the more worrying thing, really'.
Mr Ostle says he believes some of the group have been posing as Big Issue sellers in the city, adding: 'They have been stopped before with similar amounts on them. It just shows that when some of these people ask for money it is just a scam. People need to understand they are being conned.'
He went on to say: 'These people have more than enough so that they don't need to go on begging.
'We've even had officers approach members of the public that have given them £10 and ask 'you do realise he's not homeless?' and people say 'yes but I feel sorry for him'.'
The news comes just months after another man boasted to police of making £700 a week while begging in Nottingham city centre.
He is said to have used a taxi to travel between begging hotspots and was given so much food by members of the public that he had to throw vast quantities of it away.
The Nottinghamshire Police spokeswoman said: 'The message here really is not to give to people on the street. There are plenty of options available to people, through charities and hostels.'
'If you give to people on the street you really have no idea who that money is going to,' she added.
Local homeless charity Framework also urged people not to give to beggars as they have no way of knowing how the cash will be spent.
Nottingham 'beggar' found with £800 in his pockets
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