The reversal followed an 18 month consultation into changes to pre-pack legislation, including the proposed introduction of a Chapter 11-esque moratorium period, which was widely welcomed by the print industry.

In recent years pre-packs have became a major issue for the print industry, distorting competition, so it is of no surprise that the announcement was not well received.

The BPIF said that it has already spoken to the Insolvency Service and "left them in no doubt about how we felt about the news".

First 4 Print Finishing managing director David Nestor told PrintWeek: "I think it is absolutely disgraceful. How the government believes that it is unnecessary to make changes to the current system? We must all be wrong.

"The current legislation is flawed; surely measures should be brought into place to prevent companies from using the current system to their advantage and offloading their debt when times get tough. Surely if tighter restrictions were in place it would reduce the number of companies using this method as a get out of jail card."

Fellow finisher Neil Oakley, managing director at Larkbeare, said that he was disappointed the government felt the system worked in its current guise.

He added: "I’m not quite sure who exactly they asked for them to reach this opinion.

Perhaps the government feels that a quick sale is a sale as opposed to the possibility of more job losses from a protracted sale.

"Over the years there have been a number of companies in our sector that we would have been interested in purchasing if only we had been allowed access or involvement in the process.

"I am positive that the creditors of these companies did not get the best deal that they could have, which is supposed to be the administrators' directive. So now we all sit here and wait for the next company to go down the tried and tested route and just sigh in disbelief that it can keep happening."

Technoprint managing director Mark Snee added: "The government is being deeply cynical by using their ‘moratorium on new regulation’ as an excuse for not sorting out this 'fraud’s charter'."

Business Form Express managing director Colin Roberts said he wasn't surprised by the news.

"I can’t see too much changing on legislation over the next few years," he said. "So we need to be more street wise. We got caught for £30,000 by a pre-pack at the end of 2009. We were naive and should have seen it coming, it was an expensive lesson.

"We will never ever deal with a pre-pack under any circumstances. If everybody had the backbone to follow the same policy we wouldn’t be having this discussion."

However, not all companies were as moved by the government's announcement. Tim Elliott, managing director at paper supplier EBB said: "The pre-pack issue is a less emotive one today because so many failures now collapse straight into liquidation. With the decline in print fortunes, scavengers seem less inclined to pick over the bones; we have really noticed this change over about the last 24 months."