LONDON (Reuters) - Police will investigate newspaper reports that supermodel Kate Moss took illegal drugs, Scotland Yard said on Wednesday, as a second fashion house parted ways with the 31-year-old over the scandal.

The police inquiry comes after the Daily Mirror printed pictures of the London-born model that the tabloid said showed her snorting cocaine.

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another setback for one of the world's most famous fashion figures, retailer Burberry said it had ditched plans to work with Moss this year due to the controversy.

Its announcement followed a decision on Tuesday by Swedish-based fashion giant Hennes and Mauritz to cancel an advertising campaign using Moss.

French fashion house Chanel said on Wednesday it would not renew a contract with Moss that expires next month, but declined to comment on whether this was linked to the drug claims.

Police said any investigation would require more evidence than newspaper photos before it could proceed.

"Assistant Commissioner Tarique Ghaffur has reviewed the matter and had asked officers from the specialist crime directive to look at reports as highlighted in a national newspaper," a Scotland Yard spokeswoman said.

Moss's lawyer, Gerrard Tyrrell, was not immediately available for comment on the police investigation. Moss has previously denied taking hard drugs and has yet to comment on the Mirror's claims.

Moss, who has a two-year-old daughter, won substantial libel damages in July over claims by the Sunday Mirror that she collapsed in a cocaine-fuelled coma in Barcelona in 2001.

FASHION HOUSES FLEE

H&M said it had made its decision to sever ties with Moss after talking to her, saying she was regretful. It gave no further details.

Burberry, which has no contract with Moss, also decided to ditch the model.

"We had one project scheduled with Kate for this autumn and in the circumstances both Kate and Burberry have mutually agreed that it is inappropriate to go ahead," it said in a statement.

"We are saddened by her current circumstances and hope she overcomes her problems as soon as possible," Burberry added.

While not linking its decision to the scandal, Chanel's announcement will add to Moss's woes as she seeks to limit the fallout of a September 15 report.

Billed by the Mirror as an "undercover investigation", it featured grainy images apparently of the catwalk queen taking cocaine.

"We have a campaign with her until the end of October and we don't have any other projects (with her) after this date," a spokeswoman for Chanel perfumes said.

Moss has been the face of Chanel's Coco Mademoiselle perfume since 2002.

She was discovered by a modelling agency as a 14-year-old schoolgirl, and her waifish good looks have graced the covers of countless magazines.

Tabloid interest in Moss intensified in recent months because of her on-off relationship with British rocker Pete Doherty, who has admitted to addiction to cocaine and heroin.

Local media have reported that Moss earns about 4 million pounds a year through commercial contracts.

(Additional reporting by Mike Collett-White in London and Kerstin Gehmlich in Paris)