Official inquiry into demise of Rover

The government gave the go ahead for an investigation of MG Rover today after Trade and Industry secretary Alan Johnson appointed fraud and insolvency specialists to launch an official inquiry into the firm's collapse.

Johnson has appointed Guy Newey QC, a barrister at the Maitland Chambers in Lincoln's Inn and Gervase Mac-Gregor, a partner with the accountancy firm of BDO Stoy Hayward to head the probe.

Johnson said an initial report by the Financial Reporting Council's Review Panel into the company's demise had raised enough questions to demand a further study. However he declined to release the report saying it could prejudice the new findings.

The investigation is likely to focus on MG Rover's owner Phoenix Ventures.