The Manx taxpayer is having to fund the winding-up of a collapsed investment fund.

New Earth Recycling and Renewables (NERR), part of the New Earth Group of Funds, went into liquidation in June.

The group, which was managed and promoted by Premier Group Isle of Man, itself now in liquidation as the Examiner revealed earlier this year, invested in the development and ownership of recycling facilities in the UK.

NERR and its two feeder funds, Premier Investment Opportunities Fund and Eclipse Investment Fund, had some 3,249 investors, the majority of whom are unlikely to get any of their money back.

Joint liquidator Alex Adam of Deloitte wrote to NERR’s shareholders and creditors this month to explain there was no cash even to pay for the liquidation - and the island’s financial regulator had stepped in to pick up the tab.

In a letter seen by the Isle of Man Examiner, Mr Adam writes: ’Due to the lack of readily available assets in the liquidation estate, the Isle of Man Financial Services Authority ("FSA") is providing funding by way of a non-recourse loan to the joint liquidators to meet the costs of the liquidation.

’This funding arrangement is subject to continuous review and can potentially be withdrawn at short notice.’

He added: ’However, we have maintained dialogue with the FSA throughout the period with respect to the progress of and strategy for the liquidation and, for the time being, the funding arrangement remains in place to allow the investigations to continue.’

He describes the liquidation as a ’complex matter’ and said the focus was now on one potential claim relating to cash receipts into the company.