The Telegraph has seen a leaked copy of a report by parliamentary ombudsman Ann Abraham due to be published next week, which blames the Treasury for failing to regulate the insurer properly.
The delayed report is also expected to criticise the FSA and the Government Actuary’s Department.
Over a million customers lost up to half their pensions and savings when the insurer was hit by a financial scandal in 2000.
The insurer had valued its customers’ investments at a sum £3bn higher than the firm’s total assets and then slashed the value of customers’ policies.
The Equitable Members Action Group has long-maintained there was a case for compensation and the report could pave the way for £4bn of claims against the Government.
Abraham has been investigating the Equitable Life case for the past four years and her report has been delayed three times already.
Last year the Government and FSA submitted a 500-page response to Abraham’s original damning report, delaying its publication until this year.