Bosses at car maker Caterham are smarting after revealing losses of more than £20 million caused by a mothballed deal with French manufacturer Renault.

The Dartford-based company, which makes the distinctive Caterham Seven model, was forced to write off costs of more than £15.8 million after the failed venture.

Sales reached £27 million in the 18 months to June last year according to its latest accounts submitted to Companies House.

This was only a comparative drop of 0.8% on revenues of £18.2 million in the year to December 2012, when it had a different accounting period.

Directors said they were “disappointed” with the results in which the company made a loss of £20.3 million over the 18 months, compared to £582,000 the year before.

This was mainly caused by costs incurred on its joint operation with Renault to develop a new road car to take on Prosche, which the French firm exited in March last year.

“The final results are not considered representative of the underlying trading performance of the business..." - Graham Macdonald, Caterham Cars Group

It left Caterham, which also saw its F1 team fall into administration in 2014, forced to write off millions it spent on research and development and legal costs.

It has retained the intellectual property from the programme but bosses said “uncertainty exists as to whether the project will be reactivated in the near future”.

Chief executive Graham Macdonald said: “The company is undergoing a period of significant change as the shareholders challenge the business to grow significantly in the medium to long term.

“This has seen significant investments in various areas of the business and a significant increase in short term operational costs and overheads to prepare for this planned growth.

“The final results are not considered representative of the underlying trading performance of the business due to significant losses and costs incurred as a result of transactions which have been fully funded by the parent company and its ultimate shareholders.”