The toys of Corgi, originally created by the Mettoy company, which began making pressed metal toys in Northampton in the 1930s, sold millions at their peak, and have become prized collectors' items.

Hornby said Leicester-based Corgi would sit alongside its existing hobbies business, which includes Scalextric slot car racing, Airfix models and Humbrol paints.

Hornby chief executive Frank Martin said: "It is a fantastic brand and has a superb reputation worldwide. We intend to build on the brand's super heritage and invest to build its premier position in the market."

Corgi Other famous toys in its heyday included the Batmobile and the Lotus John Player Special Formula One car, while it also makes models of commercial vehicles such as Eddie Stobart trucks.

Included in the deal is Corgi's own model railway brand, Bassett-Lowke, which is more than 100 years old and caters for high-spending model train enthusiasts. Bassett-Lowke's Flying Scotsman costs £699.

Corgi was sold to US giant Mattel in 1990, before a management buy-out in 1995. It was bought by Hong Kong-based model-maker Zindart in 1999.

Corgi recently moved production to the Far East to cut costs but failed to make a profit last year despite sales of around £6.5 million.

Hornby plans to strengthen Corgi's product range as well as boost the marketing and distribution of its toys.

The company will retain "key" Corgi staff - taking on 10 in Leicester, four in Hong Kong and one in the US - but would not comment on potential job losses.