The Pensions Regulator has reportedly laid claim to more than £12 million that campaigners were hoping would be used to help workers who were made redundant following the collapse of MG Rover in 2005.
As part of £26 million being held by MG Rover Capital, the money was due to be paid to Phoenix Venture Holdings - the consortium that bought and operated the carmaker during its last five years. The remainder of the cash is owed to Lloyds Banking Group.
In 2005, a trust fund was set up to provide payouts for former Longbridge workers, and campaigners were expecting Phoenix's share of the cash to be transferred into it.
According to the Mail on Sunday, the regulator which oversees the running of UK's pension schemes is now understood to have claimed the money to reduce the burden on the Pension Protection Fund, into which the Rover scheme was transferred after it had insufficient assets to meet its liabilities.
The Pensions Regulator declined to comment on the reports, but it is understood that Business Secretary Vince Cable has been approached by campaigners, though he declined to interfere with the regulator's decision.
A Department for Business, Innovation and Skills spokesperson said: "BIS fully understands the impact that the closure of MG Rover had on its employees and local communities and sympathises with all those affected.
"At ministers' request BIS has carefully considered this complex issue, however, it is not possible for the department to intervene on this issue as it is not appropriate for BIS to interfere."
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