ADMINISTRATORS called in to oversee the running of Farepak now have the power to investigate whether the firm's directors played a role in the company's collapse.

But the findings of a separate Department for Trade and Industry (DTI) investigation into the hamper company will not be known for some time.

Minister for Consumer Affairs, Ian McCartney, revealed the news at the launch of a new Government initiative designed to protect money paid in advance to hamper scheme companies.

Mr McCartney said the report by administrators BDO Stoy Hayward on the Westlea-based company would be completed in two to three weeks' time.

"It should be ready by the middle of April and I'm working on the basis that we will receive that report around that time," he said at the Department of Trade and Industry's headquarters in London yesterday.

"As for the company investigation report, I cannot give you a time on that. The DTI report is being completed with the investigation that is going on by the administrators."

Mr McCartney said BDO Stoy Hayward had recently been authorised to liquidate Farepak.

He said: "The administrators have got the power to look at not just how the company collapsed, but whether directors had any role in that collapse."

The minister said he could not comment on how either investigation was progressing or if any of the directors were culpable for Farepak's collapse.

Almost £40m was lost when Farepak went into administration leaving thousands of families out of pocket last Christmas.

It has been reported that money from Farepak savers was being used to prop up its parent company European Home Retail.

But directors including the firm's managing director Nick Gilodi-Johnson have failed to give an explanation as to how the company went bust.

An Adver investigation revealed last October that the now defunct hamper firm ceased trading, despite making a £1.2m profit two years ago.

Financial statements obtained from Companies House showed profits of £1.283m for the year ending April 28, 2005.

Immediately after Farepak's demise, some £8m was raised over a six-week period for customers who had lost money.

The fund was used to compensate families who had lost out and to send out remaining hampers before Christmas.

But the Government has gone a step further by devising a policy of ring-fencing money paid into similar schemes in the future.

It follows a review of Christmas hamper schemes by Brian Pomeroy, chairman of the Financial Inclusion Taskforce.

Mr Pomeroy argues the importance of genuine consumer choice and encourages mainstream financial services providers and major retailers to compete in the consumer savings market.

He also recommends more is done to inform and educate consumers about the advantages and disadvantages of the range of Christmas savings options available to families.

In response to the Pomeroy Report, the Government has announced a secured agreement from the hamper industry to establish an industry-led scheme to ensure consumers' interests are protected through ring-fenced accounts.

The Office of Fair Trading will also receive £1m in funding to conduct a consumer advertising campaign in the coming months on Christmas savings schemes and mainstream alternatives.

The Government also responded to the Pomeroy Review by launching its financial inclusion strategy.

Economic Secretary Ed Balls said events such as Farepak would be prevented through greater promotion of credit unions and similar financial schemes.

"We have been working with Christmas savings firms to develop an industry-led scheme to ring-fence money they collect from families so it can't be swallowed up among other debts if a company or it's parent firm collapses," said Mr McCartney.

"The collapse of Farepak caused untold stress and financial worry for thousands of families in the lead up to Christmas.

"Many of those people were among the most vulnerable consumers and I am determined that they must never be left unprotected again."

Mr McCartney said the ring-fenced contributions would ensure that consumers' money would only be returned should the company go bust.

He added that the contributions would be put in a trust fund, which would be overseen by independent directors.

The fund would be protected under Trust Law similar to the protection used for the National Lottery's prize money.