Equitable Life policyholders 'were failed by Government'

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They issued their warning after the Parliamentary Ombudsman told Chancellor Alistair Darling to apologise to Equitable Life policyholders and compensate them for any money they lost as a result of regulatory failure.

In her long-awaited report into the Government's regulation of the mutual, which came close to collapse in 2000, Ann Abraham said she found evidence of "serial regulatory failure" for more than a decade.

More than a million people lost up to half of their life savings after the Government gave people a "wholly misleading picture" of how safe their investments were.

Policyholders are estimated to have lost £4.65 billion as a result of the regulatory failures, according to campaigners for compensation.

Today Paul Weir, founder of the Equitable Late Contributors Action Group, told BBC Radio 4: "We are prepared to fight for as long as it takes to get money and if that means going to judicial review, that's what we will do."

Ms Abraham concluded that the former Department of Trade and Industry and the Government Actuary's Department were "passive, reactive and complacent" in their regulation of the society and identified 10 instances of maladministration. She called for a compensation scheme to be established.