New York prosecutors have convened a special grand jury to consider evidence in a criminal investigation into former US president Donald Trump’s business dealings, according to The Associated Press.

The development signals that the Manhattan district attorney’s office is moving toward seeking charges as a result of its two-year investigation, which included a lengthy legal battle to obtain Mr Trump’s tax records.

AP cited their source as a person familiar with the matter who was not authorised to speak publicly and did so on condition of anonymity. The news was first reported by The Washington Post.

Manhattan District Attorney Cyrus Vance Jr is conducting a wide-ranging investigation into a variety of matters such as hush-money payments paid to women on Mr Trump’s behalf, property valuations and employee compensation.

Mr Vance has been using an investigative grand jury through the course of his probe to issue subpoenas and obtain documents. That panel kept working while other grand juries and court activities were shut down because of the coronavirus pandemic.

The investigation includes scrutiny of Mr Trump’s relationship with his lenders; a land donation he made to qualify for an income tax deduction; and tax write-offs his company claimed on millions of dollars in consulting fees it paid.

The new grand jury could eventually be asked to consider returning indictments. While working on that case, it also will be hearing other matters. The Post reported the grand jury would meet three days a week for six months.

The new grand jury is the latest sign of increasing momentum in the criminal investigation into the Republican ex-president and his company, the Trump Organisation.

Attorney general Letitia James said last week she assigned two lawyers to work with Mr Vance’s office on the probe after her civil investigation into Mr Trump evolved into a criminal matter.

Ms James, also a Democrat, said her office was also continuing its civil investigation into Mr Trump. She did not say what prompted her office to expand its investigation into a criminal probe.

In recent months, Mr Vance hired former mafia prosecutor Mark Pomerantz to help run the investigation and has been interviewing witnesses, including Mr Trump’s former personal lawyer, Michael Cohen.

Mr Trump issued a statement last week complaining he was being “unfairly attacked and abused by a corrupt political system”. He contends the investigations are a “witch hunt” and part of a Democratic plot to silence his voters and block him from running for president again.

In February, the US Supreme Court buoyed Mr Vance’s investigation by clearing the way for the prosecutor to enforce a subpoena on Mr Trump’s accounting firm and obtain eight years of tax returns and related documents for the former president, the Trump Organisation and other Trump entities.

The documents are protected by grand jury secrecy rules and are not expected to be made public.

Mr Vance’s investigation has appeared to focus in recent weeks on Mr Trump’s long-time finance chief Allen Weisselberg. His former daughter-in-law Jen Weisselberg is cooperating with both inquiries.

She has given investigators reams of tax records and other documents as they look into whether some Trump employees were given off-the-books compensation, such as apartments or school tuition.