LONDON, May 21 (Reuters) - Shares in guarantor lender Amigo , which is awaiting a court decision on a rescue plan, fell as much as 50% after a temporary suspension of share trading was lifted on Friday.

Amigo applied to the High Court for permission to cap compensation payments to customers, saying a deluge of mis-selling claims threatened it with collapse.

Subprime lenders in Britain have come under pressure from a regulatory clampdown on high cost credit providers in recent years and the pandemic has added to the strain.

Amigo's rival Provident Financial quit its around 140 year old doorstep lending business earlier this month, putting 2,100 jobs at risk.

Amigo temporarily suspended trading in its shares on Wednesday pending the court outcome, but applied for trading to resume on Friday after the court said it could take a few days to reach a judgment.

Amigo shares were down a third at 15.8 pence at 0900 GMT.

The Financial Conduct Authority objected to Amigo's plan, saying it would short-change customers at the High Court hearing on Wednesday, after reversing its earlier stance of staying on the sidelines.

Amigo, which has said cutting payouts is the only option for it to remain viable and avoid insolvency, has also drawn criticism from politicians and consumer groups.

"No surprise to see the stock trade down heavily this morning as investors are presumably spooked by the fact that Amigo could fall into liquidation – and the judge's decision was not the 'slam dunk' that investors thought it might be," Goodbody analyst John Cronin said in a note.

Amigo's shares had tripled in value over the year to date from 8 pence to 24 pence prior to the trading suspension, as investor confidence built that a rescue plan would be approved.

They have plummeted from a peak of over 300 pence shortly after the company floated in June 2018, after regulatory concerns and boardroom tussles torpedoed the stock.

Around 95% of votes cast by current and former Amigo customers ahead of the court hearing backed the proposal. (Reporting by Iain Withers, Editing by Dhara Ranasinghe, Elaine Hardcastle and Barbara Lewis)