Equitable report row brewing

THE compensation battle at Equitable Life will escalate sharply in the next month after Scots judge Lord Penrose delivered an 800-page report on the insurer's near-collapse to the Treasury.

It is expected to make stinging criticisms of regulators, particularly the DTI and the Government Actuaries Department.

Financial Secretary Ruth Kelly, in an exquisitely worded response, said: 'The Treasury will now review the report to check for any legal obstacles preventing its publication in full.'

If obstacles are found, a fierce battle is likely as 500,000 compensation-seeking policyholders clamour for the full report. Attempts to talk down compensation are already under way.

The Treasury needs to step carefully because it was the regulator for a critical time before the Financial Services Authority took over.

One wrinkle could delay the row. Equitable is suing its ex-directors and auditors Ernst & Young. These might seek to delay publication of the report on the grounds that it could prejudice their defence.