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Farepak directors could face legal action over the collapse of the Christmas savings club, the Consumer Minister suggested today.

An official investigation into the Swindon-based firm by the Companies Investigations Branch of the Department for Business, Enterprise and Regulatory Reform has been completed, Gareth Thomas said.

In a written Ministerial statement, Mr Thomas said the CIB was now taking independent advice on whether the evidence in its report warranted legal action.

He said: The collapse of Farepak was dreadful for the thousands of people who lost money. The Government is working hard to prevent other families suffering similar problems in the future.

We initiated a comprehensive investigation to establish the facts. We are now getting legal advice on whether there are grounds for further action.'' The report is subject to limited disclosure and will not be published.

But Mr Thomas said: If proceedings are taken against any party involved, this will become public knowledge if or when the case reaches open court. We will do everything in our power to process this quickly.'' The investigation had taken longer than expected to complete because it involved gathering information from Farepak and other companies which were in administration.

Mr Thomas added: The report is over 700 pages long and could lead to court proceedings so taking short cuts in the investigation was not an option.'' Some 150,000 families lost about £40 million savings when the Swindon-based firm went into administration in October 2006.

Creditors, including customers, are expected to get about 5p in every pound returned.

Former consumer minister Ian McCartney welcomed today's statement.

Mr McCartney said: It is right that no stone remains unturned to get to the bottom of this murky affair.

I understand that at this stage ministers have to step back and let the authorities look at the evidence. In my view it is in the public interest that the findings find their way into the public eye as soon as possible so that the victims and their families know the full story of how they were ripped off.

It's time those responsible were held to public account. Farepak victims have the right to justice.

If this 700 page report has any evidence of wrongdoing then this should be tested in open court. The victims of Farepak and the country have the right to know.

I also welcome the decision by ministers that the report is disclosed to the Accountancy and Actuarial Discipline Board to ensure that not only the officers and directors of Farepak are held to account but also the accountants.

I now call on the Office of Fair Trading to co-operate with ministers to ensure that the remaining hamper companies have in place effective protection for customers. No one's Christmas should be spoilt ever again.''

2:14pm Monday 12th May 2008

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