A Norfolk businessman hopes a national investigation into shocking claims of misconduct by the Royal Bank of Scotland (RBS) could at last end his personal nightmare involving the same bank.

Andy Keats, 53, has been battling for justice since what he describes as a 'crazy' decision by the bank forced the closure of his business Keepsafe with the loss of 30 jobs in Dereham.

The former police sergeant, who has involved local MP George Freeman in his six-year campaign, believes his voice might finally be heard now a top-level inquiry is under way into the bank's treatment of small businesses.

Father-of-three Mr Keats said he had been in daily contact with Lawrence Tomlinson, entrepreneur in residence at the Department for Business, Innovation and Skills, who has forced the national probe after disclosing a dossier of evidence that allegedly shows RBS deliberately forced companies into default to seize their properties.

While the investigation by city watchdogs will focus on the treatment of firms by the turnaround division of RBS – Global Restructuring Group (GRG) – and its handling of loans classed as risky, he said his own difficulties had ironically occurred without Keepsafe owing the bank a penny.

Mr Keats, of Church Lane, East Tuddenham, near Dereham, said his firm, which produced ID tags for pets with an attendant telephone contact service, was 'highly profitable' with a healthy annual turnover of £1m and rocketing sales when his dispute with RBS, which extended Keepsafe's debit and credit card facilities, came out of the blue.

He said: 'RBS decided one day that if we were to stop trading all our customers would go to the bank to reclaim their entire money – even up to 10 years afterwards.'

He said the year after the dispute began in 2006, RBS terminated its agreement with Keepsafe for a second time – on this occasion for good – and rendered the firm immediately insolvent by withholding customers' payments.

Mr Keats recalled having to tell his shocked staff on November 30 that the company was going into receivership.

'The whole thing happened days before I was going to sell the company for an agreed price of £2.5m,' he said.

After an exhausting battle that has seen Mr Keats go through the courts as well as RBS's own complaint procedures he said he had finally been shown internal bank documents last year allegedly admitting its assessment of Keepsafe's risk was flawed.

Mr Keats, who is now being supported by Mr Freeman in his efforts to restart mediation with RBS, said: 'I have told the bank I am at the end of the queue concerning compensation. I am doing this for my staff and creditors.'

Mr Freeman, in a letter to the bank's chief executive sent earlier this month, wrote: 'I wonder whether you might consider some mediated or negotiated outcome for Mr Keats.

'You will be alive to the potential damage inherent in these allegations for RBS and NatWest at this crucial stage in its progress towards sale.'

He said it was 'great news that Vince Cable has listened to the numerous MPs and SMEs who have complained about what seems, on the face of it, to be grotesque injustices in regard to bank financing'.

He said: 'Having dealt with Mr Keats' case for the last four years, I have seen how he has had to deal with RBS and NatWest and has had to face a series of unacceptable issues and challenges.

'I have seen at first hand banks not responding and, when they do, ignoring previous communications and passing on debts to debt collection companies.

'It is now over to the regulators to get to the bottom of this, establish the facts and help the vital SMEs (small and medium enterprises) in our region prosper in the future.'

An RBS spokesman said it would not be able to comment on an individual customer's case.