Bradstock went into liquidation as the PI crisis became the last straw for the struggling broker and an unquantified hole in its staff pension scheme.

The group blamed a 400% increase in PI premiums for triggering its demise.

Bradstock had been fighting for survival since it found a £14m deficit in its pension fund in 2001, along with a £6.2m deficit in shareholders' funds.

Its first half results this year showed a £544,000 pre-tax loss, but chief executive and chairman Nick Bryce-Smith said he was about to appoint a new chief executive.

Talks with the prospective chief collapsed this week when it became clear that Bradstock would not be able to get PI cover.

Its previous PI insurer, the mutual Griffin Insurance Association, refused to renew the cover leaving Bradstock out on the open market.

Bryce-Smith said the quotes came in at 400% more than before.

"We got a week's notice of the premiums we would have to pay," he said.

Bradstock called in the liquidators last Monday, just hours afters its shares were suspended on the Alternative Investment Market where they had fallen to 44p from more than 240p in 2001.

Bryce-Smith said he "honestly didn't know" the current state of the pension scheme's deficit after a compromise deal, agreed by the high court last year, saw Bradstock take a £7.4m charge.

Bradstock had received "lots of approaches" for a sale but "very few of them were appropriate," he said.