But chief executive Blanc denies there is "sweetheart deal" to protect management jobs

Aurora Corporate Services, the Independent Insurance run-off operation, could be sold to a non-insurance company following a deal that would protect managers' jobs.

Bids for the business have been invited from a shortlist said to feature businesses such as IBM and Vertech.

Such a sale is likely to protect the existing management, which includes figures who were at the helm when Independent crashed in June last year, from competition for their jobs.

Industry insiders have asked why Aurora is still employing managers whose records are tainted by association with the highest profile failure for years.

About 98% of Aurora staff, including managers, are ex-Independent.

One industry source suggested that creditors' interests would be served better by trimming the Aurora's headcount of 370 and installing new management untainted by association with Independent.

This, he said, would fetch a higher price and increase efficiency so returning more money to creditors.

Aurora chief executive Ken Blanc denied there was a specific sweetheart deal to protect management jobs, but admitted Aurora's managers would effectively pick the successful bidder, subject to approval by liquidator PricewaterhouseCoopers (PWC).

He said retaining the staff was "critical for the creditors".

"There hasn't as such been a specific agreement but the management team are empowered to carry out the transaction."

The team would draw up and whittle down the shortlist to a single recommendation. The liquidators would be involved in the process so would be likely to approve the recommendation.

"The management team and staff want to feel like they have a say in their own future.

"The best interest of creditors is to keep the team together."

It was too early to say if the details of the sale would include measures to encourage efficiency in the run-off operation, he said.

"There's an appropriate balance to be struck between service delivery and optimum efficiency."

He confirmed Aurora could be sold to a non-insurer but added: "It's probable that the core offering will remain in the insurance sector."

A PWC spokeswoman said the Aurora staff were the best to handle the run-off. She said: "We would seek to ensure continuity in terms of retaining their skills going forward."