UK – The Pension Protection Fund was silent today over the crisis-hit Turner & Newall Pension Scheme, which could be facing wind-up after parent company Federal-Mogul withdrew its offer to continue the scheme.

PPF chairman Lawrence Churchill did not respond to repeated calls about the issue. The PPF would probably have to pick up the tab if – as now seems inevitable - the T&N trustees opt for a delayed wind-up.

Analysts have warned that a T&N wind-up would leave the UK's new Pension Protection Fund with a huge hole before it even starts operating.

A spokesman for trustee Alexander Forbes would not confirm today whether a wind-up was being considered.

The T&N scheme is 875 million pounds in deficit and has become a key element in a takeover bid for Federal-Mogul by US financier Carl Icahn.

"We're disappointed with this turn of events but will continue to work with all parties to seek a solution which is in the best interests of all the members of the pension scheme," the spokesman said.

"We had hoped to be able to find a way of enabling the Pension Scheme to continue and be restored to a sound financial position, on the basis of solid financial commitments from Federal-Mogul.

"Unfortunately, Federal-Mogul has not felt able to do this in view of uncertainty about the new statutory regime to be brought in under the recently passed Pensions Act and has now withdrawn its offer to continue the pension scheme."

"It is not clear at this stage what the outcome will be but the Independent Trustee will continue to work with all parties to seek a solution which is in the best interests of all the members of the pension scheme."

Last month pension analyst John Ralfe told IPE that that the PPF trustees may now feel it is their duty to consider a delayed wind-up, following indications from the government that were interpreted as making the PPF retrospective.

"Since T&N's PPF shortfall is around 500 million pounds, will it open its doors in 2005 with a deficit of at least this size, to be paid for by other companies?" Ralfe said.

Meanwhile the government has announced a consultation on the protection of pension provision in business takeovers where the Transfer of Undertakings (Protection of Employment) regulations - known as TUPE - apply.