Former employers of The Accident Group (TAG) have been awarded a £4m payout by the government, a report revealed.

The Department of Trade & Industry (DTI) under its redundancy payment service has compensated the 2,500 former TAG employees because they were sacked in May without being given a month's pay.

A DTI spokesman said almost all the staff had now been paid.

TUC representative Alec McFadden, who represents 1,300 of the employees, said he expected to secure a total of about £8m for the staff through employment tribunals.

Solicitor Bryan Slater, who has been working with McFadden, said workers were still considering whether to take legal action against TAG's directors, including founder Mark Langford, revealed the report.

Slater is currently seeking a liquidation of TAG, leaving creditors free to pursue the directors.

TAG called in the creditors after racking up liabilities of £81m. Unsecured creditors are expected to get nothing back from the administration, concluded the report.

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