(Adds quotes from Mandelson)
By Luke Baker
LONDON, Aug 11 (Reuters) - Britain's Serious Fraud Office (SFO) will not carry out a criminal investigation into the sale and collapse of carmaker MG Rover, it said on Tuesday, effectively drawing a line under a four-year saga.
The SFO said in a statement it had reviewed documents relating to the transaction and the 2005 demise of the company and determined after consultation with legal advisers there were no grounds to initiate a criminal investigation.
MG Rover, Britain's last major independent carmaker, went into administration in April 2005 with debts of almost 1.3 billion pounds ($2.2 billion) and the loss of 6,000 jobs, prompting opposition calls for an inquiry into its collapse.
In July this year, after the completion of a four-year probe into the car plant's failure that was never made public, Britain's department of business asked the SFO to determine if there were any grounds for criminal prosecution.
"The Serious Fraud Office ... does not intend to begin a criminal investigation," it said in a short statement on Tuesday, giving no reasons for its decision.
Business Secretary Peter Mandelson defended the SFO's announcement and the time it has taken to investigate the company's collapse, saying thoroughness was necessary.
"It was important to have clarity on whether or not this was a case that the SFO should be investigating," he said. "The workers who lost their jobs and the creditors who were owed nearly 1.3 billion pounds by the collapse deserved no less.
"They have waited a long time to see the findings of the report and the way is now clear for us to publish," he said, referring to the unpublished report into MG Rover's collapse.
The report, which is estimated to have cost 16 million pounds, will be published on Sept. 11, Mandelson said.
Debate about the company's failure has focused on four executives, known as the Phoenix Four, who took over MG Rover in May 2000 after buying it for a nominal 10 pounds with an interest-free loan from a previous owner, BMW.
The four came in for criticism after their representatives confirmed they had drawn up to 20 million pounds in pay and pensions during the years they controlled the firm. They have said there was no basis for an SFO investigation.
A 2006 parliamentary committee criticised the government for its handling of MG Rover's collapse, citing specifically its lack of dealings with the company's new owners and a lack of preparation before the firm went bust.
Opposition politicians accused the government of wasting millions of pounds of taxpayers' money to prop up the ailing carmaker in the run-up to a parliamentary election in 2005. (Editing by David Holmes) ($1=.6059 Pound)