Crunch forces leading trust to cease trading

The Environment Trust, based in the East End of London, says it has instructed accountants and insolvency practitioners Harris Lipman to convene a creditors' meeting, which will take place on 9 December.

In a statement, the trust said that the housing slump had stalled sales of homes at its development of 47 environmentally friendly affordable homes in Sheffield.

It added that a wholly-owned subsidiary company, Welsh Biofuels, which produces wood pellets for fuel, had been hit by the contamination of wood supplies used to make the pellets.

Since it was set up in 1979, the trust has run renewable energy projects, given consultancy advice, undertaken environmental improvement works and has developed environmentally friendly homes. It led the £25 million redevelopment of Mile End Park in Tower Hamlets.

According to records from voluntary sector regulator the Charity Commission, the trust had an income of £595,000 in 2006/07 and a total expenditure of £731,000 in the same financial year. The charity employed 14 staff, according to the records.

Jon Aldenton, the trust's chief executive, said: "Our financial position means that we are no longer in a position to continue trading."

He added: "We are devastated, but take some comfort from the fact that we leave a proud legacy. As a charity, we have built up community assets and we are working to save those for the community."