Just 3,099 companies went bust in England and Wales in the second quarter of this year, almost 18% down on the corresponding period for 2003.

Malcolm Shierson, a partner with Grant Thornton's recovery and reorganisation practice, said: 'The number of company insolvencies are at one of the lowest rates ever.'

But he added that the trend was not affecting the larger companies, for which the number of failures was continuing to increase.

R3, the association for business recovery professionals, welcomed the fall as 'good news for the business sector'. But the figures may prompt fears of an insufficient workload to go around the insolvency practitioner community. David Hargrave, a partner in the business recovery services practice at PricewaterhouseCoopers, said such fears were premature, however.

'I still think the market is relatively busy, but the focus is on consensual restructuring rather than formal insolvency,' he said.