According to R3, many administrations are being hindered by suppliers withdrawing their services, which means the administrator cannot trade the business in administration – forcing them to continue to supply would cut the number of pre-packs.

R3 president Steven Law told PrintWeek that the organisation would be calling for any company that has a contract with a business that goes into administration to be held to that contract. Through the insolvency act of 1986, utilities companies are held by this, but the act does not cover all suppliers.

The organisation believes a take-up of the proposals would result in a 14% reduction in liquidations, a 22% fall in pre-packs, would rescue an additional 2,700 businesses a year and ultimately increase returns to unsecured creditors.

"In the recession of the early 1990s, it was common for the receiver to trade a business to maximise the return to creditors," Law said. "But there has been a growing trend over the past five years of suppliers trying to take advantage of the situation.

"Insolvency practitioners are finding that they are held to ransom. The money from other creditors is taken away by these suppliers, they might say they want £100,000 before they switch the power back on. Others will continue to supply but put the tariff up."

If the ruling was enforced, a paper or ink supplier working under contract would have to continue supplying an affected business. However, if no legal contract was in place, a supplier could still refuse to trade with that firm.

Law added that a consequence of suppliers pulling their contracts was that insolvency practitioners were being forced to sell companies via pre-pack deals.

He said: "For suppliers it is a risk-free deal, as any creditor that worked with the company during the administration will be prioritised, even above the administrator's remuneration."