The UK arm of US magazine Reader's Digest may be the first company to have been driven out of business by an unfunded pensions promise - but the story may not be over yet, with the government's regulator warning it may pursue the US parent company over the debt.

The Reader's Digest Association announced yesterday it was filing to put its UK subsidiary into administration, following the Pensions Regulator's rejection of a rescue deal that had been agreed between the company and its pension trustees.