FAREPAK customers received more bad news yesterday when a High Court judge ruled they were not entitled to a £1m payback before Christmas.

It was hoped money invested immediately after Farepak's collapse in October, and before administrators took over, could be returned to agents immediately.

The hundreds who paid in money after the collapse argued the money was held "in trust" by the agents for customers, and should therefore be returned to them.

The victims hoped to have the money in time for last-minute Christmas shopping.

But at an emergency hearing yesterday, Mr Justice Mann said the money belonged to the insolvent company, and should therefore go in the general "pot" for distribution to all those owed money.

He said he could not close the door on further legal argument and stressed his sympathy for the victims.

He regretted he could not authorise repayments and accepted the legal obstacles could be seen as "technical and unmeritorious", but insisted they were real issues.

"They [the funds] must be disposed of properly and on the basis of law, not purely on the basis of sympathy and Christmas," he said.

If the Farepak victims' case had been successful, the hundreds affected could have received sums ranging from £17 to £1,500.

In The Northern Echo yesterday, Kath Morton, a Farepak agent from Coundon, County Durham, said it would have been "lovely" to get a Christmas bonus.

"I think it should go to the customers," she said. "Just to give them something would be lovely."

When Farepak collapsed in October, an estimated 150,000 people lost more than £40m between them.