The circumstances that led to its problems are as yet unclear, but an official statement is expected to be released shortly.

Ian D Green and S A Ellis of PricewaterhouseCoopers were brought in as administrators.

The firm was incorporated in 1965 and its majority shareholder, Michael Knight, is also the chairman of Picon and was president of Ipex 2002.

Knight Machinery (Holdings) made a pre-tax profit of 120,318 on sales of 12.7m for the year to 31 July 2001, its last filed accounts.

Following the news Knight has resigned from the chairmanship of the Picon Council and from his role as a director of Picon.

Picon chief executive John Brazier said: "We are greatly saddened to hear of this news. Over many years, Michael Knight has made a hugely valuable contribution to the development and management of Picon, not least in his recent capacity as President of Ipex 2002.

"On behalf of the directors and staff at Picon, I would like to thank him for his unstinting service and commitment to the organisation and wish him and his colleagues well in the future."

The next Picon Council meeting is scheduled for 6 November, and following that a further announcement will be made concerning Knight's successor as chairman.