F&I Management & Training

Richard Burden, the Labour MP for Birmingham Northfield, whose constituency covers the car plant in Longbridge, said the former bosses, nicknamed the Phoenix Four, had the means to solve the impasse.

However, the former owners now say the money laid aside to cover the £12.5m payout they promised is at risk after a bank came forward to claim a debt.

HBOS, a part of Lloyds, which is 41 per cent owned by the Government, has called in a £23m debt after losing millions in the firm.

The Phoenix Four said the HBOS claim jeopardised the trust fund and said it was "fundamentally and morally wrong".

They said it was a "spurious" action which would prevent 6,000 car workers who were made redundant at the Midlands factory from getting the money that they were promised.

HBOS said it had a duty to recover any losses it had incurred and said that the Phoenix Four were not in a position to promise money to former staff which they already owed to someone else.

Others, including the MP, suggested the accusation was a smokescreen intended to mask the fact that all the Phoenix Four's promises about a fund for workers who lost their jobs have, to date, proven empty.

Mr Burden said: "The Phoenix Directors still have it in their power to end the delay and to get money into the Trust Fund for their former employees.

"They have already had to wait five years - and that's five years too long.

"The Phoenix Directors awarded themselves millions of pounds over the years from their involvement with MG Rover and related companies.

"That money does not appear to have been held up by any possible claims from HBOS. So there is no reason to hold up why money due to former employees who have already lost so much."