In the normal run of events, this type of investigation would normally wait for the conclusion of the administrator’s final report, but Javid said the  ‘unique circumstances’ of the collapse of  BHS last week, which put 11,000 jobs at risk, meant an inquiry should begin as soon as possible.

Javid said: ‘I have asked the Insolvency Service to bring forward its investigation rather than wait three months for the administrators to report before launching their inquiry.

‘This investigation will look at the conduct of the directors at the time of insolvency and any individuals who were previously directors. Any issues of misconduct will be taken very seriously.’

In her reply to Javid’s letter asking for the investigation, Sarah Albon, chief executive of the Insolvency Service, stated that should the investigation conclude that one or more present or former directors have been involved in any misconduct, an application may be made to a court to ask that they be disqualified from acting as a director for a period between two and 15 years depending on the nature of their misconduct.

For any wrongdoing which took place after 1 October 2015 and caused a loss to creditors, an application could also be made to a court for an order that compensation be made for losses incurred.to which the conduct of the directors of BHS led to its insolvency.

The investigation will look at actions which might have detriment to any employees who are owed money, and will consider the pension protection fund.

Green sold BHS in March 2015 for £1 to Retail Acquisitions Ltd (RAL), a group of investors led by former racing driver Dominic Chappell. A year later KPMG supported the new owners in drawing up a company voluntary agreement (CVA) which saw landlords of its stores agree to reduced rents. However, RAL’s attempts to raise additional financing failed, as did negotiations over BHS's £571m pensions deficit, leading to Duff & Phelps being appointed as administrators.

The Insolvency Service said it would not be providing updates on the inquiry’s progress, in case this threatened the ability to obtain a court order or instigate criminal proceedings, but would make public details of any subsequent decisions about director disqualifications.

The BIS and works and pensions select committees are holding a joint inquiry into the events surrounding the administration. Green has confirmed that he will appear in person at an evidence session.  The three other groups of witnesses the work and pensions committee intends to hear from ahead of his appearance are the The Pensions Regulator and the Pension Protection Fund (on 9 May 2016); BHS pension trustees; and Chappell.

Details of the letters between Javid and Albon on BHS administration are here