THE ailing maverick record label owned by the man who discovered Oasis has left the Queen facing a £33,000 loss. Poptones, set up by anti-royalist Alan McGee, 41, has sacked its nine employees. The company announced half-year pre-tax losses of £1.1m in March and has blamed 'difficult times' in the industry.

The Queen, advised by Sir Michael Peat, Keeper of the Privy Purse, invested £50,000 after the firm was floated on the Alternative Investment Market last year.

Her investment in a label whose acts included a gay, communist, Mexican Elvis impersonator called El Vez, and Jamaican dub artist Lee 'Scratch' Perry, stunned the music industry. The ethos behind the company was to exploit modern technology in the music industry to sell CDs direct for £9.99, undercutting most retailers.

However, none of the Poptones signings have come anywhere near the international success of Oasis, the band McGee signed to his Creation label.

The Queen bought 2.5m shares at 2p each when Poptones floated 20% of its stock last August. Within a few months of the flotation the Queen could have cashed in her shares for a profit of more than £12,000. However, in the last year the company's shares have flopped along with most of its releases, falling to 0.67p and leaving the Queen with a paper loss of £33,000.

Other investors included Martin Edwards, the non-executive chairman of Manchester United, hi-fi tycoon Julian Richer and Alan Hansen, ex- Liverpool defender and football pundit.