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Company liquidations jumped by a quarter in the last three months according to official figures today.
The Insolvency Service said there were 4,001 voluntary and compulsory liquidations in England and Wales in the third quarter of 2008. The figures represented a 10.5% rise on the previous quarter and an increase of 26.3% on the same period a year ago.
Opposition MPs are expected to say the figures represent a failure of government policy and confirm the economy is heading into recession.
Tories and Liberal Democrats have argued the government has failed to support businesses during the downturn and prevent a large rise in companies falling into insolvency.
Ministers have come under pressure to force the UK's major high street banks to increase lending to small and medium sized businesses caught out by the credit crunch.
However, the government will take comfort from a smaller rise in personal insolvencies. There were 27,087 individual insolvencies in the same period, a rise of 8.8% on the previous quarter and an increase of 4.6% on the third quarter last year.
Bankruptcies jumped by 17,341 while another 9,746 accepted an Individual Voluntary Arrangement, the controversial payment plan with creditors that allows individuals in financial distress to avoid bankruptcy.
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