A multi-million pound trust fund to help MG Rover workers has been delayed by the possibility of legal action against the collapsed carmaker's directors.
It will be postponed further if Alan Johnson, the Secretary of State for Trade and Industry, agrees to calls for a fullblown inquiry into MG Rover's collapse.
Mr Johnson is in the West Midlands tomorrow for meetings with officials and trade unions about the help available for workers who have lost their jobs.
Issues on the agenda will include MG Rover's pension scheme, which has a shortfall reported to be up to £400 million. The directors of Phoenix Venture Holdings, MG Rover's parent company, announced in April they were creating a trust to ensure PVH's assets were used for the benefit of Longbridge employees and their families.
The company's value was estimated at between £10 million and £30 million.
Assets included Studley Castle, in Warwickshire.
Independent trustees were appointed, including Nigel Petrie, a non-executive director of PVH last year; local historian Professor Carl Chinn and the Bishop for Birmingham, the Rt Rev John Sentamu.
But the trust has still not been set up because of concerns that PVH's assets could become the subject of court proceedings.
A source close to the trust yesterday said: "Currently there are trustees, but the trust itself is not a legal entity.
"It is not clear whether any legal action might be taken by creditors who believe PVH owes them money, or whether legal action might be taken against the Phoenix directors personally. Nobody wants to promise Longbridge workers anything just for their hopes to be dashed."
The Financial Reporting and Review Panel, the official City watchdog, will this week present Mr Johnson with the results of an initial inquiry into MG Rover's accounts.
Reports suggested it will conclude that improprieties may have been committed at MG Rover before its collapse. This could lead to a full-scale inquiry, chaired by an outside expert such as a QC.
It could also lead to legal action to have the so-called Phoenix Four - John Towers, Peter Beale, John Edwards and Nick Stephenson - disqualified as directors.
By the time the trust is up and running, much of Phoenix's remaining assets may also have been diverted into the MG Rover pension scheme.
The Government has set up a Pension Protection Fund specifically to help workers in company pension schemes if their employers collapse.
However the MG Rover pension scheme is not currently eligible, because Phoenix Venture Holdings could be considered liable for it, and it is still trading.
One option is for the Government's Pensions Regulator to force PVH into insolvency.
But last night PVH said it was willing to meet its liabilities by paying "a fair proportion" of the deficit.
Meanwhile, a Black Country MP has condemned Tipton firm RDS Automotive Interiors, a Rover supplier, where 75 jobs have been axed.
Speaking in the House of Commons, Adrian Bailey said it was "utterly unacceptable" that the firm went administration and effectively continued trading with new staff.
Mr Bailey (Lab West Bromwich West) said: "Another company, RDS Advanse Ltd from the same group, bought that company.
"So a company that went into administration was bought by another in the same group, laid off workers and did not pay them. It is now recruiting other workers, starting with a clean balance sheet."
Nobody from RDS Advanse was available to comment last night.