The Government will finally publish a report into the collapse of MG Rover after the Serious Fraud Office (SFO) said that it would not begin a criminal investigation into the sale of the carmaker.

The Department of Business, Innovation and Skills (DBIS) said that the four-year study, which cost £16 million in taxpayers’ funds, will now be published on September 11.

The decision follows an announcement from the SFO today that it would not investigate the sale of MG Rover to the so-called "Phoenix Four" in 2000.

Earlier this year, Lord Mandelson, the Business Secretary, raised the prospect of a further delay in publication of the report into MG’s collapse in 2005 by calling in the SFO to see whether there was a criminal case to answer.

If the SFO had decided to mount a full inquiry, publication would have been put back until after the end of its investigation, since the Government claimed that knowledge of the inspectors' findings might have prejudiced any court case.

Today, Lord Mandelson said: “It was important to have clarity on whether or not this was a case that the SFO should be investigating.

“The workers who lost their jobs and the creditors who were owed nearly £1.3 billion by the collapse deserved no less.

“They have waited a long time to see the findings of the report and the way is now clear for us to publish. Today we are setting out the timetable and arrangements.”

Commenting on the further four-week delay, a spokeswoman for the Department of Business said: “A minimum of four weeks from now until publication is judged necessary to ensure sufficient time for witnesses to be contacted over this holiday period and arrangements to be made.”

The SFO said that its decision followed a “review of documents” sent by the DBIS.

The SFO said: “Following the DBIS referral, a small team of SFO investigators studied the report and made recommendations to the SFO’s Director, Richard Alderman. He read the recommendations, read the report itself and took advice from the SFO General Counsel, Vivian Robinson, QC, and an external opinion also from eminent lawyer, Clare Montgomery, QC. The Director then made the decision not to initiate a criminal investigation.

“As the inspectors’ report has not been made public, the SFO is unable to go into detail about the reasons for its decision."

MG Rover became mired in controversy when, shortly before the 2005 General Election, it collapsed into administration with the loss of 6,000 jobs at its plant in Longbridge, Birmingham.

It subsequently emerged that the four owners of the Phoenix consortium, which bought MG Rover for a nominal £10 in May 2000 from the German carmaker BMW, had taken out some £40 million from the business in pay and pensions.

The Phoenix Four — John Towers, Nick Stephenson, Peter Beale and John Edwards — have always denied any wrongdoing.

In a robust response, a spokesman for the four said today: “The directors were flabbergasted when the Business Secretary, Lord Mandelson, referred the matter to the SFO and said at the time there was absolutely no basis for a criminal investigation as the question of fraud had never been raised at any point.

"That view has been wholly vindicated by today’s announcement and begs the question why the Government chose to refer the matter to the SFO in the first place."

The Phoenix Four said that the decision to refer the matter for the SFO was "the latest in a long line of bizarre and wholly unnecessary twists in the MG Rover story".

The spokesman said: “At every turn, the Government has tried to avoid accounting for its own role in this affair – especially how the £100 million government bridging loan that could have saved the company was withdrawn at the last minute in 2005. There have been more than 30 Freedom of Information requests made to the Government regarding their part in all of this and they have systematically turned every one down.

“Overall, this has been a very shabby and deeply unsatisfactory process.”

MG Rover’s assets were sold three years ago to the Chinese company Nanjing Automobile, which in 2007 resumed MG production at the Longbridge plant.

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