London Economics' fate hangs in balance

The offices of London Economics, a pioneering economics consultancy, stood empty yesterday as its part-owners launched what was described as a "major reorganisation". It was not clear when or even whether the company would reopen.

The offices of London Economics, a pioneering economics consultancy, stood empty yesterday as its part-owners launched what was described as a "major reorganisation". It was not clear when or even whether the company would reopen.

There has been more than a year of turmoil at the consultancy, which was at one time one of the UK's largest with more than 200 staff. BSI, a French consulting group, bought a 30 per cent stake in June last year, when the Frenchman Andre Safir took over day-to-day running of the company.

The partial sale came after months of dispute about its future. Afterwards a number of its staff, including many senior managers, left. These included Sarah Hogg, a former adviser at 10 Downing Street under John Major and now chairman of the consultancy Frontier Economics and a columnist for The Independent, and Bill Robinson, who had been a special adviser at the Treasury.

BSI, which is based in Paris,said yesterday that no one was available to comment.

The departure of key staff during the past year is believed to have dented London Economics' fortunes severely. It was launched by John Kay and Nick Morris in 1986, and pioneered the use of rigorous micro-economic theory in advising on privatisations and regulatory issues.

Separately, Frontier Economics has announced that Sir Ian Byatt, the former water industry watchdog, was joining its team of advisers.