The Serious Fraud Office (SFO) is due to investigate the collapse of MG Rover, it was announced today.
Business secretary Lord Mandelson confirmed that the SFO would be involved, after a four-year inquiry by the Department for Business, Innovation and Skills concluded that there could be grounds for a criminal investigation.
Lord Mandelson said: 'There has been a comprehensive and thorough investigation into the events which led to the company failing, workers losing their jobs and creditors not getting paid. The SFO must now see if there are grounds for prosecution.'
The decision means that the results of the inquiry will not be announced until the SFO investigation has been completed.
Phoenix Ventures took over MG Rover in 2000 from BMW and received a 427 million interest-free loan. The four directors of the business are believed to have received over 40 million in pay and pensions over five years.
A spokesman for the Phoenix team said: 'Four years on, any suggestion of another investigation is frankly ridiculous and smacks of kicking this issue into the long grass.'