Hope is growing that thousands of workers hit by the collapse of a company pension scheme will be bailed out by a new Government-backed fund.

Members of the Turner & Newall (T&N) pension scheme - including current and former workers at the Federal Mogul engineering plants in Bradford - should be able to claim through the new Pension Protection Fund (PPF) if the scheme is wound-up.

Under the PPF, which is due to come into force on April 6, existing pensioners of a scheme which is wound-up when a company becomes insolvent will receive 100 per cent of their entitlement while workers yet to reach pensionable age will receive 90 per cent.

The PPF - which will actually take over the assets and the running of such schemes - will only apply when they are wound up after April 6.

But, because the T&N scheme is currently frozen rather than wound up, hope is growing that the PPF - which will be run by an independent board - would agree to pay out.

Union officials representing current and former workers at Federal Mogul, the struggling American car parts manufacturer which took over T&N, last week held further talks with Pensions Minister Malcolm Wicks about the issue.

The T&N scheme has been frozen since July last year as a result of financial problems at Federal Mogul, hitting a total of up to 40,000 pensioners.

It has hit particularly hard in Bradford where the Federal Mogul piston plant has been closed with the loss of 380 jobs.

Dick Croft, regional officer for the Amicus union, said he was cautiously optimistic that the scheme would qualify under the new PPF, which has been introduced as part of the Pensions Act 2004.

"Nobody has given us significant reasons, as yet, as to why the scheme should not be admitted but we still do not know what the extent of the PPF is," said Mr Croft.

"However, there is no desperate rush to resolve this and we are not having crisis talks working up to any sort of deadline.

"It seems the scheme will be wound up and we are working towards the PPF taking over the running of it."

A spokesman for the Department of Work and Pensions confirmed that Mr Wicks had held talks about the T&N crisis with MPs and officials representing the union, company and administrators Kroll.

He said "it would appear likely" that the T&N scheme would qualify under the PPF but said he could not guarantee that would be the case as the fund had still not been formally wound up.

Hopes that a settlement to the Federal Mogul crisis could be found without the scheme being closed were dealt a blow in December when it emerged talks between the company and the fund's independent trustee had broken down.

Mr Croft said the situation was now more hopeful because all the sides in the dispute were working towards a solution.

"We still can't guarantee anything but, at the moment, we don't know of any circumstances that would disallow the scheme from the PPF," he said.

"However, people have had their hopes built up and then been let down before.

"At least now we are all working towards the same aim and ensuring that the scheme is included in the PPF."