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The long-awaited report by the National Audit Office on irregularities in the Student Loans Company has been held up because auditors have been unable to quiz Ron Harrison, chief executive, due to his ill health. The report, which was to draw on an audit by Coopers and Lybrand as well as internal reviews, is not now expected until Easter.

The company denied rumours this week that Mr Harrison has left the company permanently and is negotiating a severance package. Instead, a spokesman said that Mr Harrison was still on sick leave and that for the foreseeable future Sir Eric Ash would be heading the company. Mr Harrison took indefinite sick leave last December and Sir Eric, former rector of Imperial College, became acting chief executive.

Robert Sheldon, MP, chairman of the Public Accounts Committee, to whom the audit office will present its report, has written to Stephen Byers, Labour MP for Wallsend, saying that the inquiry has taken longer than expected due to Mr Harrison's ill health.

The National Audit Office is also undertaking a value-for-money study of the company which is expected in July.

Shadow education minister Bryan Davies was due to launch an attack on the Student Loans Company in a House of Commons debate late on Wednesday. "The Student Loans Company has been a complete shambles since its inception.

"The Government has already conceded that the situation is not acceptable, but there is no evidence that they are doing anything to improve the plight of students across the country who are faced with putting work before study because of the shambles the Government has created," he said.