Company liquidations jumped by 25%

Opposition MPs are expected to say the figures represent a failure of government policy and confirm the economy is heading into recession.

Tories and Liberal Democrats have argued the government has failed to support businesses during the downturn and prevent a large rise in companies falling into insolvency.

Ministers have come under pressure to force the UK’s major high street banks to increase lending to small and medium sized businesses caught out by the credit crunch.

However, the government will take comfort from a smaller rise in personal insolvencies. There were 27,087 individual insolvencies in the same period, a rise of 8.8% on the previous quarter and an increase of 4.6% on the third quarter last year.

Bankruptcies jumped by 17,341 while another 9,746 accepted an Individual Voluntary Arrangement, the controversial payment plan with creditors that allows individuals in financial distress to avoid bankruptcy.

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