ACTION groups of policyholders with troubled mutual Equitable Life yesterday joined forces to call for a fresh inquiry into the affair.

They called on the Parliamentary Ombudsman to widen an investigation into the regulators who have been handling problems at the business.

The seven action groups, under the banner E7, believe policyholders have lost up to £4bn as result of difficulties surrounding Equitable Life.

They called for Government compensation if the Ombudsman finds evidence of regulatory failure.

Accompanied by 14 Liberal Democrat and Conservative MPs, they cut a giant cake with "Parliamentary Ombudsman please HELP!" iced on it.

They also held up clocks to mark the first anniversary since Parliamentary Ombudsman Michael Buckley announced he would carry out a statutory investigation into the Financial Services Authority's handling of events at Equitable, beginning in 1999.

But the groups complain that 12 months later they are no nearer to knowing whether or not they will receive compensation.

They have called for the new Parliamentary Ombudsman, Ann Abraham, who takes over on Monday, to widen the scope of the inquiry to 1994.

The protestors want it to include the periods when the Treasury and Department of Trade and Industry acted as regulator.

E7 spokesman Paul Braithwaite said: ''America has shown us how huge financial scandals can and should be addressed swiftly, independently and honestly.

''Equitable policyholders are fed up with being fobbed off with a shabby establishment cover-up.

''There's a very important principle at stake, we're entitled to believe that if there is regulatory failure, then it will be admitted and we will be compensated - otherwise our trust is gravely misplaced and undermined.''

Liz Kwantes, of Equitable Life Members Help Group, said: ''We want to make the Parliamentary Ombudsman widen the scope of his inquiry.

''We feel that we have been left out in the cold for the last two years (since Equitable closed to new business) and totally ignored."