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The businessmen involved in the collapse of MG Rover face being barred from holding any future directorships, Lord Mandelson has announced.
Friday's move comes in the wake of the publication of an in-depth report into the events that led to the collapse of the car maker in 2005.
The report revealed that five senior executives earned almost £42m in pay and pensions from MG Rover before its demise.
Former MG Rover chairman John Towers, ex-vice-chairman Nick Stephenson, Peter Beale and John Edwards each earned £9m. A further £5.7m was paid to the company's chief executive, Kevin Howe.
The 'Phoenix four' bought the company from BMW for £10 in 2000 but five years later the company collapsed with the loss of more than 6,000 jobs, owing creditors nearly £1.3bn.
The men have denied any wrong-doing and have not been accused of breaking any law.
But the business secretary announced that lawyers have begun work compiling the evidence required to bring proceedings against the directors to prevent them holding company office in future.
“This has been a painstaking enquiry by independent inspectors,” Lord Mandelson said.
“It was important to get all the facts into the open so that workers who lost their jobs and creditors who were not paid know the truth. "
He has written to the Commons business and enterprise select committee after the inquiry found inaccurate and misleading explanations were given to MPs by one of the directors.
And he also decided the report should be referred to the Financial Reporting Council, the regulatory body for auditors, accounting and corporate governance.
Dods Parliamentary Communications Ltd