Liquidator Smith and Williamson said litigation relating to the collapse of no-win, no-fee company Invaro was in its early stages, following detailed investigations.

Smith and Williamson head of corporate recovery Tony Murphy also said the company was in discussions with shareholders and creditors to wind-up Invaro sister companies Medico-Legal Reports and Justice Direct.

Depending on whether Smith and Williamson's petition for early liquidation was accepted, the two companies would go into voluntary liquidation either this week or in early September, said Murphy.

Talks are also underway to wind up Invaro's reinsurance company, The Rock. Murphy said: "Assets from the company will go to meet its liabilities and the remaining funds will be delivered to shareholders and creditors.

"This could amount to several million pounds."