MFI battling for survival - report

The group could be forced into administration within days if the dispute with landlords is not resolved, the Daily Telegraph said.

The company - which has been hit by falling demand for "big ticket" goods in a slumping housing market - has more than 1,000 staff and runs more than 100 stores across the UK.

Chief executive Gary Favell led a management buyout of the firm at the end of September - when over a third of the stores were closed as part of the move.

But Mr Favell is said to have caused anger among existing landlords by demanding a "rent-free" period for three months to prevent the rest of the business also being put into administration.

While some landlords agreed to the move, others - including the group's former owner Galiform - have not and are currently demanding rental payments, according to the report.

Financial restructuring firm Kroll is said to be acting on behalf of those landlords seeking rental payments.

MFI is one of the UK's best known retail brands and established itself as a major player in home furnishing shortly after it was founded in 1964 by Noel Lister and Donald Searle - who called it Mulland Furniture Industries after Searle's wife's maiden name.

It started out as a mail order business but three years later opened its first shop, in Balham, south London and grew to become the biggest furniture retailer in the UK, with a value of £1 billion at one point.

But its position as market leader was hit by the growth of rivals stores such as Ikea, B&Q and Homebase, and sales fell from £854 million in 2003 to £742 million in 2005.