The UK government is pressing ahead this week with controversial proposals that could make directors liable for pension deficits in companies that collapse, despite fierce industry opposition.

The British Venture Capital Association had called for the clause to be scrapped, claiming it would be disastrous for the private equity industry when it was first suggested in the summer. The provision in the Pensions Bill says company directors, including venture capitalists involved in buy-outs, might be liable for any pension fund deficit in the event of a company going into liquidation.