Ministers were on Monday forced to deny Conservative accusations that the decision to refer the collapse of MG Rover to the Serious Fraud Office was a ruse to avoid political embarrassment over the role played by the government in the carmaker’s demise.

The political row erupted after Lord Mandelson, UK business secretary, announced that the findings of the four-year £16m inquiry into MG Rover would not be published, pending a decision by the SFO on whether there were grounds for prosecution.