'Prompt' MG Rover inquiry pledge

Opposition parties want a full independent inquiry

The man leading a government inquiry into the accounts at stricken MG Rover and its owner says he expects to make initial findings within a fortnight.

Sir Bryan Nicholson warned against making rush judgements and said it was vital proceedings were "by the book".

The four directors of owners Phoenix Venture Holdings branded suggestions of accounting irregularities "ridiculous".

Around 5,000 redundancy notices are being posted to workers after a rescue deal with a Chinese company collapsed.

A further 1,000 staff are being retained to complete orders but also face redundancy.

Opposition parties are calling for a full independent inquiry into the car-maker's collapse.

'Very careful'

The regulatory Financial Reporting Council, chaired by Sir Bryan, will look at how Phoenix has used £450m left to it when it took over from BMW in 2000.

He told BBC 5 Live's Weekend News that initial findings would be "prompt, within the next week or two".

The suggestion that a black hole of £400m or any other accounting irregularity could exist ...is ridiculous Phoenix Venture Holdings Prayers said for Rover Convoy in support of workers

"But you have to be very careful in these things," he added.

"It's unfortunate that the election is taking place which gives so much more attention, but it's very important that regulation is carried out properly and by the book."

Directors have strongly denied reports that millions of pounds are missing from company accounts.

Workers have been angered by the money made from MG Rover by directors.

The end for MG Rover was signalled when China's Shanghai Automotive Industries Corporation pulled out of a possible rescue deal last week.

'Media speculation'

In a statement, Phoenix Venture Holdings said: "There has been much media speculation surrounding so-called accounting irregularities and black holes in the accounts of PVH and MG Rover.

The difficulty about the government organising an inquiry is that there are questions that need to be asked of government as well Malcolm Bruce Liberal Democrat spokesman 'Devastating for dealers' Longbridge eyes redevelopment

"The suggestion that a black hole of £400m or any other accounting irregularity could exist in a business which has been the subject of not only annual audit by Deloitte & Touche but over the past years has been examined by a Trade and Industry Select Committee... is ridiculous."

Trade and Industry Secretary Patricia Hewitt said workers were feeling "pretty sick" that directors had made a lot of money out of the company.

"They did not put up huge amounts of money, the company has not been a success and it was virtually given to them by BMW."

'Squandered'

Tory spokeswoman Caroline Spelman said there was a need to understand what had gone on behind the negotiation process aimed at saving the 400-acre site at Longbridge, in the West Midlands, over the past few years.

Liberal Democrat spokesman Malcolm Bruce said Phoenix had "squandered" the money.

He added: "The difficulty about the government organising an inquiry is that there are questions that need to be asked of government as well, so it needs to be at arm's length."

Meanwhile, Rover boss John Towers said he did not welcome the launch of a formal investigation into the firm's accounts and claimed he was the victim of a "character assassination".

Defending himself further, Mr Towers also said his salary and pension were significantly below the average for a company chairman.