The Serious Fraud Office has been called in to investigate the collapse of MG Rover more than four years after the carmaker went into administration.
The news raises questions about why the case was not referred to investigators earlier if there was any suspicion of criminal activity.
Business secretary Lord Mandelson that he had an "obligation" to pass the investigation to the SFO following his review of the findings from a four-year independent inquiry.
However, the four executives in control of MG Rover at the time of its demise, known as the "Phoenix Four", accused him last night of using the probe as a ruse to forestall publication of the report, which is expected to be critical of the Government.
A representative of the four Midlands businessmen said: "We suspect that this is a government ruse to conceal its own failings."
An investigation was "the only way that the Government can avoid publishing a report that is likely to be critical of government", the representative said.
Lord Mandelson will confirm the SFO's involvement in a short written statement to parliament today.
John Towers, a former Rover Cars director, and three other executives paid a nominal £10 to buy MG Rover, Britain's last independent volume carmaker, from BMW in 2000 following encouragement by Stephen Byers, the former cabinet minister.
The Phoenix Four later paid themselves millions in salaries and pension benefits.
When MG Rover was near collapse in 2005, the Government stepped in with financial support which delayed its demise.
The Birmingham-based carmaker went into administration in April 2005 with the loss of 6,000 jobs.
After the closure of MG Rover, Mr Towers invested in property on the continent.
Two other members of the Phoenix Four, John Edwards, a Stratford car dealer, and his sales director Peter Beale, have retired.
The fourth, Nick Stephenson, works as an automotive design consultant in the US.
Lord Mandelson declined to comment on any of the specific allegations contained in the report.
Legal sources close to the inquiry, however, expressed some surprise that the case was being referred to the SFO after so much time had already elapsed, potentially leaving investigators without a trail to follow.
An earlier report on the administration of MG Rover published by PwC, the professional services firm, found no suggestion of fraudulent behaviour at the company.
Lord Mandelson brushed off suggestions that the SFO inquiry could delay the publication of the independent inquiry, noting that the fraud agency would be able to work quickly now that the "key facts" had been established.
Source: Financial Times