The Government has reneged on its promise to respond to the Parliamentary Ombudsman’s report on the Equitable Life disaster.

It said that it would respond in the autumn to the report by Ann Abraham on the near-collapse of the life insurer in 2000.

However, yesterday it said that it would not make a statement before Christmas. The report is highly critical of the regulation of Equitable, and calls for compensation for the thousands of policyholders. The insurer was forced to close to new business when it ran out of money and became unable to fulfil the guarantees it had given in previous pension contracts.

Ms Abraham said the Government should apologise for a “decade of regulatory failure”. The report said that a series of regulators, including the Department of Trade and Industry, the Government Actuary’s Department and the Financial Services Authority, were guilty of maladministration, and had failed to use the powers available to them to protect the interests of Equitable’s policyholders.

Earlier this week the Treasury Minister, Ian Pearson, promised MPs that a statement would be made in the Commons next week. However, yesterday the Leader of the Commons, Harriet Harman, said there would be no statement until Parliament returned from its Christmas break on Monday, 12 January.

Paul Braithwaite, general secretary of the Equitable Members Action Group (EMAG), was quoted by the BBC earlier this week as saying: “Every delay has been orchestrated by the Treasury.

“The damage to trust in regulators and the finance industry done by the Equitable debacle is immeasurable.”

More than a million people were affected by the firm’s collapse, many of them losing tens of thousands of pounds. Because many were already pensioners, large numbers have died waiting for compensation, which could total as much as £4bn.

In the light of compensation paid to savers in Icelandic banks, pressure is mounting on Gordon Brown, who has refused to say if he will contemplate paying compensation. His silence on the matter is in contrast with the Tories, who have pledged to compensate policyholders if they regain power.

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