Record number of companies set to go bust

The warning came despite official figures showing that the number of firms becoming insolvent fell by 19 per cent quarter-on-quarter in the three months to the end of September.

But the organisation said this year's total already stands at 833, almost equal to the 906 failures in 2002, which was the highest figure of the past decade.

Roy Roxburgh, an R3 council member and lawyer at Maclay Murray & Spens, said: "The concern I have with these figures is that they remain stubbornly high despite the fact that we are coming out of the recession.

"Given the impact on Scottish business of the comprehensive spending review is not fully known, it is alarming that we are already heading for a record number of corporate failures this year."

Roxburgh also warned that the number of sequestrations - the Scottish term for bankruptcy - remained at an "alarmingly high level" despite figures from the Accountancy in Bankruptcy showing a 4 per cent in personal insolvencies during the third quarter.

He said: "I don't believe the current levels of personal insolvency in Scotland are anything other than the tip of the iceberg.

"I think we have a considerable degree of serious pent-up indebtedness, which any increase in interest rates will cause to burst forth."