Enthusiasts of Meccano, the venerable metallic construction set, will be saddened to learn that its maker has declared "suspension of payments" - meaning it is unable to meet its financial obligations - in a sign that it is in financial difficulty.

The trade tribunal at Calais in northern France, where Meccano has its production base, said that court-ordered recovery proceedings known as redressement judiciaire had been decreed. A Paris lawyer described this as a French version of Chapter 11. Under the proceedings, a judicial administrator has been nominated to work with management for a six-month period.

The tribunal said that at the end of this time, options included a further "observation period" for a maximum of 20 months, a new recovery plan, a sell-off and official receivership.

Meccano lovers may be somewhat reassured by the upbeat tone of a statement from the company last week that suggests this may not be the end of the road for a group that can trace its origins back to the patenting of "Meccanics Made Easy" by Frank Hornby of Liverpool in 1901.

"After the success of the company's repositioning on its main markets and the winning back of customer confidence, the group's management and shareholders are confident about completing the entity's recovery," the Meccano statement said.

It appears that the company's problems are related, at least in part, to the popularity of electronic games and also to direct competition from low-cost construction games. A spokesman said, however, that the company's problems were not a recent phenomenon and had not been provoked by video games. "Lego (the Danish toy building blocks maker) has done a lot of harm (to Meccano)," he said, without elaborating.

After a number of changes of ownership, the company - which had a turnover of FFr148.6 million (€22.65 million) in 1998 - was taken over in April by Renaissance Investissement, an investment company majority-owned by US pension funds.