The Government could be faced with a bill of £5bn to compensate 85,000 workers who lost their pensions when their employers went bust.

There is growing speculation that a report due to be published this week by the parliamentary ombudsman will lay the blame on the Department for Work and Pensions.The report by Ann Abraham, to be published on Wednesday, is expected to conclude that the Government misled workers by falsely promoting the idea that company pensions were guaranteed.