Mr Lockrey, of Tamworth, Staffordshire, said Mamod had spent £20,000 attempting to develop a liquid fuel alternative but, once that had been finalised, the rent on the firm’s factory premises was increased beyond affordability.

He told the Mail: “It is very disappointing. It’s heartbreaking. We were England’s oldest and largest steam toy manufacturer.”

The models’ engines are powered by steam-driven pistons, which are set into motion when water is heated by a small fire in a burner tray placed under the boiler.

In October last year, hexamine was banned after officials concluded it could be used to make explosives. The rules meant it could still be bought but only under certain circumstances, with customers having to buy a licence and disclose personal details.

In March, Mr Lockrey told The Telegraph: “This is currently stopping £8,500 in orders from going out, as over 75 per cent of our products need to run on this hexamine-based fuel.”

After shutting down production, the remaining stock of miniature steam engines was sold at the factory earlier this month, with fans purchasing the final models off the production line.

The value of Mamod models has subsequently surged, with classic models fetching 10 times their original values at auction.

Mamod was founded in Birmingham by Geoffrey Malins as Malins Models. Early traction engines cost 99 shillings and sixpence – the equivalent of around £5 in today’s money – but the latest models were retailed for £300.

The Telegraph contacted Mamod for comment.