The measures, announced in the Queen's speech, will include tighter auditing rules and stronger powers to investigate companies.

Company bosses will be required to state that they have not withheld information from auditors.

Firms will also have to publish full details of any extra services they have bought from their auditors.

Not for profit boost

Corporate governance campaigners argue that auditors' independence can be compromised if they also supply lucrative consulting services to their clients.

Laws aimed at making it easier to prosecute firms responsible for fatal accidents were left out of the government's legislative timetable. Corporate killing law setback

Enron's auditor, Arthur Andersen, was said to have earned hefty consultancy fees from the disgraced energy company.

The new measures are designed to complement the Financial Reporting Council's overhaul of existing corporate governance guidelines for stock market-listed companies.

Separately, the government has committed itself to strengthening the not-for-profit sector by introducing a new type of firm, the Community Interest Company (CIC).

CIC status would be available for companies which plough profits back into social objectives such as helping marginalised groups or preserving the environment.

Examples include the Big Issue, which publishes a magazine sold by homeless people.