Julian Knight BBC News Online personal finance reporter

John Tiner, consumer investment and insurance director of the City watchdog the Financial Services Authority (FSA) can expect a grilling when he appears before the Treasury Select Committee on Tuesday.

The Treasury Committee is investigating the split-capital investment trust scandal, which has cost private investors an estimated �3bn and is the latest crisis to hit the City of London.

Split caps are complex products which spread investment across a range of different classes of shares.

Mr Tiner is likely to be questioned on how the splits crisis developed and whether the watchdog acted quickly enough to warn investors of the dangers.

Back in July, MPs heard evidence from industry bodies outlining the extent of losses facing investors.

This time the select committee will widen its net, gathering evidence from the regulator and the managers responsible for the troubled trusts.

The select committee intends to release its final report on the scandal before Christmas.

'Magic circle'

Up to 50,000 people may have lost money in splits - investments which were often marketed as "low risk".

The investments were seen as an ideal way to save for school fees or retirement.

But sustained falls in the stock market have led to 19 trusts either suspending their shares or going into receivership or insolvency, leaving investors with nothing.

The FSA launched an investigation in May, stressing that only a minority of firms were involved in the scandal and that the sector as a whole did not pose particular risks or problems.

Under the spotlight are a 'magic circle' of split cap managers, who have been accused of using investor money to prop up the share price of ailing funds.

Warning

The FSA is likely to face tough questioning on whether it was in a position to warn investors of the dangers of split-capital investments a year before the first trusts starting running into difficulties.

According to a recent BBC investigation, the regulator received warnings from the Guernsey Financial Services Commission of the dangers of splits.

Stephen Alexander from the law-firm Class Law will also appear before the committee.

He is representing about 700 investors who have lost money from the schemes.