MUSIC fans can finally uncover their ears. Telstar Records, purveyors of novelty hits from Jive Bunny to the Cheeky Girls, has had to close its doors.

The house of “cheese”, famed for its compilation albums “not available in any stores”, has gone bust leaving pop star creditors and its most high-profile client, Victoria Beckham, struggling to relaunch her singing career.

Once Britain’s largest independent record company, Telstar topped the charts with cheap and cheerful hits compilations. The Jive Bunny series sold three million copies and remains the lifeblood of mobile DJs.

Telstar’s demise was the result of a fatal brush with musical credibility. Hit records from Craig David and the R&B trio Mis-teeq encouraged Telstar to believe that it could succeed where other record labels had failed — the transformation of Mrs Beckham into a “serious” artist.

The company invested £1.2 million marketing the former Posh Spice but her first single flopped and the album recorded with the US hip-hop star Damon Dash never saw the light of day. Those expenses contributed to the label’s collapse with debts of £7.5 million.

A fire sale of its assets by administrators, which includes records by Vinnie Jones, Ant and Dec and Fat Les, has raised £1.6 million. But Telstar Records is to go into liquidation with the loss of 20 jobs.

Neil Palmer, Telstar co-chairman, blamed illegal internet downloading and a lack of support from UK radio for British pop artists for the collapse.

Creditors include Mis-teeq, whose career has taken off in the United States but whose lawyers demanded unpaid royalties from Telstar.

Mrs Beckham’s album has reverted to 19 Management, the company founded by the Spice Girls creator, Simon Fuller, but remains unreleased. Sir Richard Branson’s V2 label has snapped up the rights to Telstar’s branded R&B compilation albums, which continue to sell in healthy numbers.

But a company once valued at £80 million had strayed from its determinedly unpretentious roots. It was founded in 1982 by Sean O’Brien, who learnt his trade at Ronco, the US-owned supplier of cheap compilation albums and gadgets only a late-night television channel-flicker would buy.

Telstar secured the rights to release compilation albums of hit singles still in the charts, which were vigorously promoted on television. The 80-million-selling Now franchise followed in Telstar’s wake.

A “best of” Michael Jackson sold five million copies at the peak of his 1980s popularity and compilations such as The Greatest Love and the The Very Best of Chris de Burgh tugged the heartstrings of female record-buyers. Five years ago, Telstar sought to present a more contemporary face, creating the Wildstar label with Capital Radio to launch hot new British talent.

Success followed with the signing of Craig David, the Southampton-based “UK garage” singer, whose debut Born To Do It sold seven million copies, spending a year in the American charts. The Wildstar subsidiary continues to trade and is unaffected by the Telstar Records collapse.

In 2000 Warner Music Group paid £20 million for 20 per cent of Telstar and the expanding company predicted turnover of £100 million. A move into dance music hit paydirt with the signing of Mis-teeq. But Poptones, a joint venture with Alan McGee, the Creation records mogul who discovered Oasis, failed to generate artists with a similar hold on recordbuyers.

Mr Palmer believes that the Telstar story carries a warning for others. He said: “The perilous state of the once- great UK record industry bodes badly for this sector, unless the internet can be controlled and UK radio can once again be persuaded to support new and exciting home-grown talent.”

Explore UK News

• Crime News

• Education News

• Health News

• Science News

• Scotland News

Times Recommends

• Donor organ allowed child’s own heart to heal
• Michael Jackson: Not the final chapter
• Google Street View gets on its off-road bike