Investors claiming compensation from Knight Williams, the former independent financial adviser, are considering taking legal action against individual directors.
The prospect of a legal battle follows a meeting yesterday between Kenneth Jordan, a leading member of the 250-strong Knight Williams action group, and Angela Knight, a Treasury minister.
Mr Jordan said yesterday he was talking to lawyers about whether individual directors could be sued for negligence towards those caught by the company's alleged bad advice and subsequent collapse.
Knight Williams directors include Robin Knight Bruce and John Williams, who founded the company in 1980.
"We are exploring every avenue to ensure that the grievances of hundreds of elderly investors are met, including discussions with our solicitors and further talks with our MP," he said, adding that he was also satisfied with the fruitful discussions at the Treasury.
Mrs Knight said: "I am determined that the regulatory system will continue to deal fairly with all claims for compensation." There had been a realistic exchange of views and she hoped that the case would soon be resolved.
The meeting yesterday was the latest stage in a battle for compensation by hundreds of people who invested in financial products sold by salesmen from Knight Williams. Many savers claim the full risks were not properly explained and that they were victims of excessively high management charges.
The company went into liquidation in July this year, which may deny savers the chance of full redress.