Hi, I would appreciate some general advice on the following situation. I've looked at a few options to resolve this but I'm hoping someone may come up with something that I haven't considered.

In 2006 I started a small manufacturing company with a friend. At the time we both put in the same funds and we worked together to set it up. The Share split was 50/50 and both of us were directors.

I worked full time on this but my business partner had a full time job and was only able to devote time after hours. We had a verbal agreement at the time that I would recieve extra equity in the company in lieu of drawing a salary, as the company was just getting established.

A few months later an accountant friend suggested that he might be interested in investing in the business. He looked over the company finances, did some research of his own into the market and made us an offer. After some discussion we decided to give him 20% shareholding in the company for a financial investment as well as his time to do the company accounts / compliance.
This effectively reduced the two directors shares to 40% holding each.

Everything was looking up.

Fast forward to Now...

Two and a half years have passed since we set this up and the situation has changed drastically.
I have worked hard to establish a good name for the company. Within our market we are now an internationally recognised brand, with a very good reputation. However this is a niche market and sales are correspondingly small.
One product that was intended to seriously boost our sales by allowing us access to a larger market has been in development for almost two years. It is now only just ready for production. My original business partner was mostly responsible for these delays and has contributed too little too late. He also changed his mind some time ago about the idea of me recieving equity in lieu of salary. Figuring that I should be paid the salary when the funds became available. At the beginning of 2008 I began to pay myself the agreed salary from the company. There have been gaps where funds haven't allowed but in general the company was holding it's own.

The accountant we brought in to provide funding and look after the financial aspect of the business has failed to file annual returns for two years, incurring some serious late filing fees as well as getting us to within 1 week of the FINAL strike off date. Sick of being given the runaround and unable to tell the lies from the reality, I contacted the auditing firm myself (Luckily). I have been able to furnish the auditor with information he wasn't getting from the accountant.

In addition he has not filed a single VAT return during this time. The accountant has caused me some serious stress and he will no longer be allowed to have anything to do with the books.
My original business partner has now resigned as a director of the company in order to distance himself from any financial responsibility yet retains his 40% shareholding.

The company is in need of a cash injection to overcome the problems (late filing fees/auditers/etc) and the others are claiming poverty, putting me in a very tight position.

I firmly believe that the company can move forward with the introduction of the new product (some sales have already been made and the response is very good)
I have access to some funds to help get over this hurdle, but at this point I'm not at all comfortable with the situation.

I have discussed buying out my original business partners shares but at this point I can't afford to pay him what he's put in. If the company was valued _object_ively I'm sure it would be worthless. But I have worked very hard to build the brand and this is still worth something to me.
As of last week he was made redundant and is now looking at doing something with the company - This would work if he was willing to put some effort in but I don't see that happening. I'm also not that keen on the idea of him having an equal share given that I've drawn little / no salary over the previous two years.
I have looked at several options but at this stage I'm thinking that it's just too untidy.
Should I push to close the company down and set up something on my own?
As the physical design and appearance of the products was done by me could I consider this my IP and continue the business in another form ?