The British government has confirmed it will launch a comprehensive investigation into the life assurer Equitable Life. Some 15,000 Irish investors hold Equitable Life policies.

The inquiry will be headed by Lord Penrose, who trained as a chartered accountant and has spent the past three years working as a judge in Scotland, dealing with specialist commercial matters.

The Treasury's statement indicated that the inquiry could examiner the firm's activities as far back as the 1950s, when it began selling the guaranteed annuity policies that brought it to the brink of failure. Equitable Life was forced to close to new business in December last year following a House of Lords ruling that it had to honour its guaranteed annuity rates in full, a liability estimated at £2.6 billion sterling (€4.2 billion).