The chairman of a group representing former PMPS depositors said yesterday that the PMPA group should never have been folded.

Bill Hardy said the PMPA business was fundamentally sound when it went into liquidation in 1983. He said the fault for the collapse of the group lay with the politicians who did not protect it.

Depositors with PMPS, the deposit-taking arm of PMPA, were paid more than £1 for every £1 on deposit after legal and liquidation fees had been covered, he said.

"I just hope something like this never happens again," Mr Hardy said. "The politicians didn't understand the situation.

"I met Charles Haughey a number of times about it. He was the only one to meet us regularly. He said, I can't help you with this but you'll win in the courts as what has happened is very unjust."

The PMPA was set up by former civil servant Joe Moore at a time when all car insurance here was issued by UK firms. "As far as motorists were concerned, Joe Moore was a god because he stopped them being ripped off by the British insurance companies," said Mr Hardy.

He said most depositors with PMPS were elderly and had modest deposits. "There were 15,000 originally and the average depositor had £1,400. A lot of it was funeral money."

Many of the depositors were now dead, he said.

"When you put your savings into the largest insurance group in the State you expect it to be safe," said Mr Hardy.