The Serious Fraud Office is to investigate the circumstances surrounding the demise of Birmingham-based carmaker MG Rover in 2005.
BBC business editor Robert Peston says Business Secretary Lord Mandelson will issue a brief written statement on Monday confirming the move.
It follows a four-year inquiry into the collapse, which led to 6,000 job cuts.
The four executives in control of MG Rover at the time said there was "no suggestion of improper conduct".
A spokesman for the MG Rover directors said: "The directors have at all times willingly accounted for their actions, which kept MG Rover alive for five years."
When the MG plant at Longbridge, Birmingham, closed the government announced a £150m support package for those losing their jobs and for the estimated 12,500 people affected in subsidiary firms.
The new investigation comes after the completion of a four-year inquiry under section 432 of the Companies Act by inspectors appointed by the Department for Business, Innovation and Skills.
Ramsay Smith, speaking for the Phoenix Group: 'There is no basis whatsoever for an investigation'
Part of that investigation was supposed to find out what had happened to the more than £400m left to Phoenix Ventures when it took over MG Rover from BMW in 2000.
Our correspondent says the report by the business department's inspectors will now be delayed pending a decision on whether there will be criminal prosecutions.
MG Rover went into administration under insolvency procedures in April 2005, with debts of more than £1bn. Its assets were sold in 2006 to China's Nanjing Automobile, which revived the MG sports car brand.
A quartet of executives known as the Phoenix Four had taken control of the company in May 2000 after originally buying MG Rover for a nominal £10.
The business came with an interest-free loan of £427m from BMW, the previous owner.
There are likely to be questions raised about why the case has been referred to the SFO only after completion of the inspectors' enquiry
"John Towers, Nick Stephenson, Peter Beale and John Edwards are estimated to have taken out more than £40m in pay and pensions in the years before the business went down," said our correspondent.
The Commons public accounts committee criticised the government in 2006 for being too distant from Phoenix Ventures and not sufficiently prepared for its demise.
Our correspondent says there are likely to be questions raised about why the case has been referred to the Serious Fraud Office only after completion of the inspectors' inquiry, rather than bringing in police at an earlier stage.
'Heart of the matter'
A spokesman for the directors said that "time and again they asked for government help and didn't get it".
"Four years and £16m of taxpayers' money has been swallowed up on this [Department for Business] inquiry and the directors' major concern that it will fail to get to the heart of the matter, which is why the government withdrew its offer of a loan to the company at the eleventh hour, allowing 6,000 workers to lose their jobs," they said.
Their statement added: "Four years on, any suggestion of another further investigation is frankly ridiculous and smacks of kicking this issue into the long grass."
They also said the government had refused more than 30 requests under the Freedom of Information Act which would have revealed correspondence and documents.
They said these would have "shed some light on the government's role in the affair".
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