The plug is being pulled on taxpayer funding of the liquidation of a failed investment fund.

New Earth Renewables and Recycling (Infrastructure) PLC will now be dissolved.

The island’s financial watchdog has decided it is not in the public interest to continue to pay for the costs of the liquidation process.

NERR was wound up by the Manx authorities in June 2016.

It was part of the New Earth Group of Funds which invested in recycling plants in the UK.

The group was managed and promoted by Premier Group (IoM), which went into voluntary liquidation in November 2016.

Together with its two feeder funds, NERR had some 3,249 investors and had been valued at $292m.

But when the company folded, the value of those investments was close to zero.

Liquidators were appointed to investigate the reasons for the failure to see whether liability could be attributed to any party and if a viable claim could be made.

Now creditors and shareholders have been informed that legal advice provided to the joint liquidators has concluded that further action would most likely be unsuccessful.

As a result, the Financial Services Authority has recommended that Treasury withdraws funding for the liquidation process other than that need to bring it to a conclusion.

In their update liquidators Alex Adam and David Craine said: ‘While the advice does suggest there is merit in relation to both potential claims, it has also highlighted a number of significant challenges which mean that the overall opinion is that it is more likely than not that the liquidators would be unsuccessful should they pursue such claims.

‘In light of the above, the liquidators will now apply to court for orders that the liquidation be terminated and that the company be dissolved.’

The liquidators said they had considered whether there were any alternative sources of funding but in the circumstances concluded that there were no realistic options.

Investors had been unable to fully write down the value of their investments while a possibility of a return remained.

But there is now no longer any prospect of a return to investors.

In 2019, NERR’s liquidators failed in a legal bid to question former directors John Bourbon and Michael Richardson under oath after they declined to be interviewed.

The FSA has not confirmed how much the liquidation has cost the taxpayer.

In response to an FoI request submitted in 2019 it was determined that the information is exempt from disclosure.

But the Examiner reported in 2018 that liquidators’ fees and expenses in the winding up of NERR had by that date totalled more than £374,700.