Independent UK studio Free Radical Design has gone into administration, it has been confirmed.

The Haze developer, also thought to be developing the Star Wars Battlefront III game for LucasArts, had been plagued with rumours about its demise for a few months - something its director had denied.

Just last month Steve Ellis said: "Nothing unusual is happening here. Projects end. New projects start. That's how things have worked for nearly 10 years".

A few days later the rumours were spreading, but Ellis remained adamant: "We certainly won't be laying off any staff today. Or, for that matter, any time in 2008", he said.

"If something happens in 2009 I'm sure we'll be prepared to comment - but from where I'm sitting, whatever happens is far more likely to be positive than negative".

Unfortunately his optimism has not held up in reality. Administration company Resolve confirmed: "The company was placed in to administration yesterday afternoon".

"We will be spending the next three or four days assessing the financial position of the company but it's business as usual, although we have asked that almost all of the employees apart from a skeleton crew remain at home".

"All employees have been paid up until the end of December and we hope to make another announcement before Christmas or very soon thereafter, but we must stress at this stage that it's business as usual".

It is thought that 40 staff are still at Free Radical Design, down from 185. The remaining employees are working on concepts into 2009.