Julian Treger and Bryan Myerson, advisers to Active Value, the combative investment company, are looking to take advantage of the fall in technology valuations with the launch of a vehicle to invest in distressed internet businesses.

Mr Treger said Techrescue - which would be 67 per cent-owned by Illuminator, an internet incubator founded last year by Mr Treger and Mr Myerson, and 33 per cent by Shore Capital - was still at an early stage. It is understood Techrescue is a subsidiary of Illuminator at present, but a deal has been agreed in principle to bring in Shore Capital.

Mr Treger said: "We have already seen some businesses which are experiencing financial difficulties... we will start something in a small way, suck it and see what happens. If there is enough deal flow we might consider a fund in due course. So far Techresue have been given a "nominal" amount of capital to recruit staff and cover overheads while it searches for deals. It believes it will have access to a big pool of investors if the right deals emerge.

Mr Treger said: "The day is coming when we will see some interesting value. The Internet is not going away, it is just becoming less fashionable. We are looking for private companies which have not been able to get to the market but have raised enough rounds of funding that they have developed a significant business."