The Enron scandal rocked stock markets worldwide

A US judge ordered that Mr Fastow's wife, Lea, who worked in Enron's finance department, would face trial after failing to agree a plea bargain.

The judge had approved a deal under which Mrs Fastow would serve a short time in jail.

This deal in turn was seen as likely to lead to a plea bargain from Mr Fastow.

Mr Fastow is one of the main targets of US prosecutors, who are seeking to apportion blame for the catastrophic collapse of the firm two years ago.

High hopes

Mrs Fastow failed to exercise her option to plead guilty, despite having apparently agreed to do so in Thursday's deal.

The decision is part of an ongoing poker game over the prosecution, as both sides try to squeeze out as many concessions as possible.

If Mr Fastow were to agree to plead guilty he would become the most senior Enron official to go to jail.

His co-operation would also be a major boost to prosecutors who are trying to unravel the complex accounting frauds that led to Enron's collapse in December 2001 with debts of about $67bn.

Mr Fastow has declined to comment on the case or press reports that he was on the verge of completing a plea bargain of his own.

Bargaining chips

Mr Fastow's lawyers were negotiating for him to accept a 10 year jail term in the criminal case which is due to open in April, the Wall Street Journal and Reuters have reported.

They reported that he has also agreed to pay a $20m fine to the US Securities and Exchange Commission to settle the civil case against him, citing a source familiar with the matter.

Prosecutors are thought to be hoping that Mr Fastow's co-operation could bring them closer to filing charges against other top ex-Enron officials. Their most likely targets are former chairman Ken Lay and ex-chief executive Jeffrey Skilling.