The Arch Cru Litigation Committee said advice by Hexham MP was “massively ill-informed and in ignorance of the facts” and could fall foul off financial services regulations. 

Opperman, who is chairman of an all-party Parliamentary Committee on Arch cru, which lost 20,000 investors more than £300 million (around $490 million), said in a statement on his website that he was reluctantly urging his constituents to accept the settlement from Capita Financial Managers, the administrator of the fund.

“I cannot specifically advise you on whether to accept the Capita settlement, although you know my views that this is an offer you should accept. I say this not as an advisor, but as an observer, and your MP. Two things seem obvious: firstly, that the deadline will not be extended again and, secondly, that the parties will not make clear the basis of the agreement before the current December deadline,” said Opperman.

In some cases, Arch cru was sold as a medium to low risk investment, but it was in fact high risk. It was suspended in March 2009 by the Financial Services Authority following a warning that it could no longer trade due to pricing and liquidity issues.

In 2011, Capita set up a £54 million payment scheme with Arch Cru allongside the funds’ depositories BNY Mellon and HSBC to compensate investors in the Arch cru funds.

The ACLC has condemned the compensation package for being “derisory”, saying that it only offers around 15 per cent of their investment plus interest.

“On his own admission, Mr Opperman's advice is based on information from a Capita appointee. The simple fact is that few if any of the investments in the Arch cru funds were permissible and for that reason alone Capita FM must compensate in full,” said John Hawkes, ACLC chairman.