The 88-year-old department store went bust on Monday, putting 11,000 jobs at risk and threatening the closure of up to 164 stores in the biggest retail failure since Woolworths went under in 2008.
Sir Philip, boss of the Arcadia Group, sold BHS last year to the consortium Retail Acquisitions (RA) for £1, with debts exceeding £1.3 billion and a pension fund deficit of £571 million.
He is reported to have offered £80 million towards the cost of BHS pensions, but shadow business minister Angela Eagle said he had left others to plug the hole.
Tory MP Richard Fuller accused him of being a Judas by potentially betraying employees and pensioners, and fellow Conservative Mark Field called for an “urgent” inquiry into his conduct and that of RA.
BHS went under after last-ditch talks to find a buyer for the firm over the weekend failed, administrators Duff & Phelps said.
Property sales had not materialised leading to a lower than expected cash balance, meaning the group was unlikely to meet contractual payments.
The company will continue to trade as usual while potential buyers are sought.
RA’s owner Dominic Chappell told the Press Association no-one was to blame, saying it was caused by a “combination of bad trading and not being able to raise enough money from the property portfolio.”
He said: “In the end, we just couldn’t reach an agreement with Arcadia over pensions.”
The Pensions Regulator confirmed it was investigating the BHS pensions scheme to determine whether it would be appropriate to use its anti-avoidance powers.
But Sir Philip came under fire from MPs from both sides of the House of Commons during a debate on Monday night about the department store’s collapse.
Iain Wright, Labour chairman of the Business, Innovation and Skills Committee, said: “It cannot possibly be right that Sir Philip Green, as the previous owner of the company, loaded it up with debt, did not invest in the business and paid his wife over £400 million in dividends via the tax haven of Monaco.”
Mr Wright said owners should choose how they run their businesses, but warned: “When 11,000 jobs are under threat and the taxpayer may be liable for substantial pension liabilities, something is gravely wrong.”
Ms Eagle said: “If the worst happens the liability will be covered by the pensions protection scheme and BHS staff will get only 90% of the pension they’ve worked so hard for and saved for.
“But Philip Green seems to have got much more out of BHS for himself and his family than that.
“BHS staff and the public will understandably want to know whether the former owner who took so many millions of pounds out of the business will have to pay his fair share of the liabilities which accrued during his stewardship.”
And Conservative Richard Fuller added: “It may be that facing a large and growing pension deficit that the previous owner, when Retail Acquisitions came knocking on his door to purchase his business, went laughing all the way to the bank.
“But if that sale was done on the understanding that it was avoiding a responsibility for those pension losses, then that £1 he received was equivalent to 30 pieces of silver in his betrayal of the employees and pensioners of BHS.”
The shopworkers’ trade union Usdaw said taxpayers should not be left to pick up the pensions bill and urged the Government to intervene.
Rival retailer Sports Direct is understood to want to acquire some of BHS’s 164 stores, but will only do so if it does not have to take on any pension liabilities.
It is thought that up to 30 other retailers may look to buy either a slimmed-down version of the business out of administration or pick over its store estate.
However, experts warned that it was “unlikely” a buyer for the business in its current form would be found.
Julie Palmer, partner at insolvency firm Begbies Traynor, said: “As an under-performing brand that simply hasn’t kept up with the pace of change in the retail sector and requires major investment, it looks increasingly unlikely that any buyer will be brave enough to salvage the business in anything like its current form.”