Ministers have launched an investigation into the collapse of a “stock market for football” that has left fans almost £90m out of pocket.

John Whittingdale, the gambling minister, is to appoint an independent expert to oversee the inquiry into the failure of Football Index.

The website appointed administrators in March following a run on the business.

Punters rushed to try to withdraw their money after Football Index gave notice of a decrease in “dividend” payments. The company was forced to suspend trading and bar customers from accessing their accounts.

Many thousands of customers are believed to have lost significant sums of money.

The probe will focus on whether the Gambling Commission had the “right tools” to regulate novel betting firms such as Football Index.

Mr Whittingham said: “We know how difficult it has been for people affected by the collapse of Football Index with some losing significant sums of money.

"The gambling landscape is evolving rapidly and so we are also taking action by reviewing the Gambling Act to make sure our laws are fit for the digital age.”

Football Index, the shirt sponsor of Championship clubs Nottingham Forest and Queens Park Rangers, was criticised following its 2015 launch over fears that footballer “share prices” and “dividend payments” would depend on new customers joining the platform.

When administrators from accountancy firm Begbies Traynor were appointed last month, parent company BetIndex Limited, the operator’s Jersey-based parent, said that all customer deposits were held in segregated accounts.

The UK and Jersey gambling commissions have suspended the operator’s betting licences.