Euclidian has denied that mediation talks with the ‘stop loss' Names have taken place.

A spokeswoman for Euclidian said: "We have had no mediation talks at all with the Stop Loss Recovery Group and, in fact, the Names have been in defiance of a court order since November."

Reports had suggested that Euclidian and the Names were close to agreeing a £30m settlement to their losses over alleged mis-sold stop loss policies.

Euclidian has always denied any mis-selling.

She added that a third of Euclidian Underwriting staff had been employed by Berkshire Hathaway's Marlborough Underwriting. Another third have joined Euclidian's broking division EDL, which is headed by Euclidian's managing director Jamie Stuart, while the remaining third have been made redundant.

"All staff were notified before Christmas of the decision.

"Also, negotiations with AIG over the capital provision of Euclidian were confirmed last October," she added.