Government delays report on Rover pending fraud probe

LONDON (Reuters) - The government is to delay the publication of a report into the collapse of carmaker MG Rover in 2005 pending an investigation by the Serious Fraud Office (SFO), media reported on Sunday.

The move, which The Sunday Times said would be announced by Business Secretary Peter Mandelson on Monday, follows a four-year inquiry into the company's demise that led to more than 6,000 job cuts.

A government representative said a statement on the issue would be made to Parliament on Monday, but declined to elaborate.

Opposition politicians accused the government of deliberately delaying the report, which they said would show it wasted millions of pounds of taxpayers' money propping up the car company in the run-up to the 2005 election.

"I welcome the introduction of the fraud squad into what appears to be a major corporate scandal, but it must not be used as a smokescreen to hide what the public needs to know," said Vince Cable, the Liberal Democrat's Treasury spokesman.

MG Rover, Britain's last major independent carmaker, went into administration in April 2005 with debts of more than a billion pounds.

A quartet of executives known as the Phoenix Four took control of the company in May 2000 after buying it for a nominal sum of 10 pounds.

The business came with an interest-free loan from BMW, the previous owner.

Ramsay Smith, speaking for the Phoenix Four Group, said there was no basis "whatsoever for an investigation" by the SFO.