The number of Scottish companies going to the wall fell to the lowest level for at least nine years in 2006 as the nation's economy held up well in a generally benign UK climate.

The number of Scottish companies going to the wall fell to the lowest level for at least nine years in 2006 as the nation's economy held up well in a generally benign UK climate.

Corporate liquidations dipped 4% on 2005 to 549, official figures published yesterday show. This is the lowest annual total so far recorded, though the figures have only been collated since 1998.

The final three months of 2006 saw a slight increase, however, to 132, compared with 119 during the same period in 2005. This is still well down, however, on the peak quarterly total of 240 reached during the first three months of 2002, the tail-end of the short-lived dot.com boom.

The figures for corporate insolvency contrast sharply with another massive rise in the number of personal bankruptcies, an increase attributed to the massive overhang of consumer debt.

South of the border, The Insolvency Service also reported 13,137 company liquidations last year in England and Wales, with the fourth-quarter total slightly lower than a year earlier.

Matt Henderson, business recovery and insolvency partner at accountants Johnston Carmichael, conceded that 2006 was a benign year, but warned that the corporate failure rate is beginning to rise.

He said: "The number of Scottish corporate insolvencies in the fourth quarter rose 10.9% on 2005. The important thing to note is that these statistics do not reflect the effect of the recent rise in interest rates which will start to kick into the equation this year."

He added: "The increase in corporate insolvencies is not good news when coupled with the dramatic increase in personal insolvencies.

"High levels of personal insolvency will affect future levels of retail spending and spending on non-essential delayable' purchases."

According to Henderson, anecdotal evidence points to a big increase in failures in the first quarter of 2007. "The year has begun with a lot of statutory notices (of liquidation)," he said. "HM Revenue & Customs placed eight in The Herald last week on one day alone."

Henderson cited the independent retail sector as particularly vulnerable - "basically, any small shop selling anything that Tesco is selling", as he put it.