MG ROVER’s debts have spiralled to about £1.8 billion, The Times has learnt.

According to a report sent to creditors by PricewaterhouseCoopers, the administrators to the car group, MG Rover has assets worth only £85 million although, in an unusual move forced by a court order, the values of individual assets such as plant and machinery and tooling have been blanked out.

The £1.8 billion that the collapsed car group owes includes £641 million of “inter-company indebtedness”, pension liabilities and warranty claims. It has no income.

The report reveals that inter-company indebtedness — thought to be transactions between the various arms of MG Rover — tops the list of claims, with all divisions recording debts, including the parent company, Phoenix Venture Holdings, which is still trading. PVH showed an inter-company debt of £27 million and Studley Castle, one of its assets, has a debt of £118,672.

Administrators have estimated that MG Rover has pension liabilities of £325 million, its share of an overall deficit of £415 million for all Rover companies. Creditors’ claims lodged so far total £126.9 million. The scale of the debts will raise further questions about what happened to all the money that MG Rover started out with and will increase pressure for a full inquiry into Britain’s last independent carmaker.

Yesterday the Financial Reporting Review Panel presented an early report into the carmaker’s accounts to the Department of Trade and Industry and said that it “raised a number of questions relating to the affairs of MG Rover and its associated companies which the FRRP believes may be relevant for the DTI to consider”. Its comments are the clearest call it could make for a full inquiry.

Norman Lamb, the Liberal Democrats’ trade spokesman, wrote yesterday to Alan Johnson, the Trade and Industry Secretary, calling for a full inquiry. The Lib Dems want any inquiry to include the Government’s intervention in the carmaker’s takeover five years ago by the “Phoenix Four” directors led by John Towers. Mr Lamb’s letter said: “My understanding is that government ministers were certainly heavily involved in discussions with the purchasers at that time. I have heard complaints however that other interested parties and the wider community was excluded.”

Richard Burden, Labour MP for Northfield, which includes MG Rover’s Longbridge site, also demanded a full investigation. He said: “The DTI has the power to order further official inquiries and I am urging Alan Johnson to do whatever is necessary to establish the full facts about events leading up to the collapse of MG Rover and to make sure that these facts are made available to the public.”

The FRRP’s report is not being published and is intended to be read only by Mr Johnson and DTI officials. PVH was not available for comment.

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