By Lily Kuo

NEW YORK (Reuters) - Harvard University is investigating allegations that approximately 125 undergraduate students cheated on a spring take-home final exam, school officials said on Thursday, disclosing what would be the largest cheating scandal in its recent history.

"These allegations, if proven, represent totally unacceptable behavior that betrays the trust upon which intellectual inquiry at Harvard depends," Harvard University President Drew Faust said in a statement.

The allegations came to light in the spring when an instructor noticed similarities between tests.

The cases will be reviewed by the Administrative Board of Harvard College, which is responsible for handling violations of college rules. Students found guilty could face punishment such as having to withdraw for one year from the university, among the nation's most prestigious.

"Academic dishonesty cannot and will not be tolerated at Harvard," said Michael D. Smith, dean of the Faculty of Arts and Sciences.

Smith did not name the course in which the cheating may have occurred. Federal privacy laws prevent the university from naming any students involved, the college said.

(Reporting by Lily Kuo; Editing by Paul Thomasch and Stacey Joyce)