The attack on the insolvency regime, which includes recommendations to strengthen the current SIP 16 guidelines, comes just two weeks after an Insolvency Service report into pre-packs attracted widespread criticism concluding that there had not yet been enough time to assess the impact of SIP 16.

SIP 16 advises administrators to be more transparent with the process involved during a pre-pack deal, providing information such as marketing activities for the business and any ties the new owners have to the former directors.

The ABI has called for the Insolvency Service to "strengthen" the guidelines, "possibly by assuming direct responsibility for enforcement".

In addition, the insurance industry trade body has called for a ban on the same insolvency practitioner acting as adviser to a distressed company both before and immediately after administration, thereby "introducing a second pair of eyes" into the pre-pack process.

Finally, the group said that all unsold goods should be returned without undue delay by insolvency practitioners, rather than being counted as assets of the failed business.

Nick Starling, the ABI director of general insurance and health, said: "Recent developments in the UK insolvency regime have had a disproportionately negative effect on unsecured creditors.

"A system designed to promote corporate survival and employment risks preserving large companies at the expense of their smaller suppliers, potentially leading to more jobs lost than saved."

"Our main concerns are the complete lack of transparency in pre-pack administrations, and the absence of a voice for unsecured creditors during the insolvency process," he added.