How do I solve this in Google WMT

Around a month ago I received a message in GWT saying my site had bad links on it and to find and remove the links, these were the links they had found.

starfall.php?q=
ipods.php?q=

I trawled through all site files found them and removed them, now this morning I have a message in GWT saying,

Google detected a significant increase in the number of URLs that return a 404

When I check the crawl errors it is showing 1,031 errors, the URL's are all for the links above with keywords after the equal sign.

Now Google told me to get rid of theses links which I did, now they are saying these errors could effect my serps position.

What is the best way to clean this mess up and keep Google happy.

Do you mean bad internal linking or did someone spam your site with backlinks like that and filling the string with random keywords?

Those links had been placed in files on my site and have nothing to do with the site which is ecommerce selling power tools.

Yes seems they have spammed my site with links back to my site filling the string with random keywords like this

ipods.php?q=hepatit-c

And these are throwing the 404 (Page Not Found) error as I have removed them like google told me too

google is talking about internal links, not backlinks to your site!

djp3k05 said:

google is talking about internal links, not backlinks to your site!

Click to expand...

These might have been internal but have been removed, seems someone has placed links back to my site people are clicking and the URL is not found.

This is what they say regarding those links.

Google detected a significant increase in the number of URLs that return a 404 (Page Not Found) error. Investigating these errors and fixing them where appropriate ensures that Google can successfully crawl your site's pages.