Lord Mandelson will tell Parliament today that he has asked the Serious Fraud Office (SFO) to investigate the collapse of MG Rover, the Midlands carmaker, four years ago.

The Business Secretary is expected to confirm that the long inquiry into the group’s failure, which cost an estimated 15,000 jobs, has concluded that there are grounds for a criminal investigation.

A spokeswoman for the minister refused to comment last night on the inquiry’s conclusions, but said: “We are intending to make a statement to Parliament tomorrow, which will update MPs on the MG Rover inquiry.”

The inquiry report, which cost £15.9 million, was delivered to the Business Secretary almost a month ago, but the decision to call in the SFO is expected to delay publication indefinitely to avoid prejudicing its investigation.

The collapse of Rover into administration in 2005 led to closure of its plant at Longbridge, in Birmingham, with the loss of 6,000 jobs. A further 9,000 jobs are estimated to have been lost in suppliers and car dealerships.

Rover’s failure also led to accusations of asset-stripping by the four directors of Phoenix Venture Holdings, its parent. The so-called Phoenix Four — John Towers, the chairman, Nick Stephenson, John Edwards and Peter Beale — bought the company in 2000, paying a nominal £10 to BMW after the German carmaker had decided to break up the Rover group.

Initial local support for the takeover turned into mistrust and anger as the directors quickly became multimillionaires from the business and created a labyrinthine corporate structure.

It is estimated that the directors received a combined £42 million in pay and pensions, while the Rover workers’ pension fund ended up £470 million in deficit. At one stage, the directors took a £10 million loan note from the business to compensate them for the risk they took when they each put £60,000 of their own money into the business, which was given to them by BMW with a £500 million dowry.

Their behaviour prompted the head of BMW in Britain to call them “the unacceptable face of capitalism” and led to the launch of an inquiry by the Department for Trade and Industry (DTI), now the Department for Business. The inquiry, led by Guy Newey, QC, an insolvency law specialist, and Gervase McGregor, of BDO Stoy Hayward, the accountant, was due to take 12 to 18 months, but met many hurdles.

Last December it emerged that the Phoenix Four had stalled publication after insisting that investigators conduct fresh witness interviews. Their lawyers argued that the DTI should bear some blame for failing to provide enough aid to the carmaker. They also accused officials of disseminating damaging information, leading to some officials being interviewed for the inquiry.

The Phoenix Four responded forcefully yesterday to the SFO being called in: “There has never been any suggestion of improper conduct by the directors and this was confirmed in a report by the administrators six months after they took over the running of the company. Four years on, any suggestion of another, further investigation is frankly ridiculous and smacks of kicking this issue into the long grass.”

The former directors have said that none of the money pledged to former workers from the MG Rover Trust Fund can be paid out until the inquiry report is published. About £16 million was collected for it from asset sales.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive