Woolies shares suspended amid talks

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The ailing firm - in business for almost a century - said it was in discussions over the potential sale of its retail outlets and its 40% stake in the 2 Entertain publishing joint venture with BBC Worldwide.

But Woolworths added that both deals were subject to the approval of its banks and said "there can be no assurance" that the sales would be completed.

Woolworths' crisis talks come as reports suggested furniture company MFI was in danger of going into administration.

Woolworths, which has around 800 outlets, confirmed that BBC Worldwide was the potential buyer of its stake in 2 Entertain.

The firm added: "Pending the outcome of these discussions and the consequent impact on the company's financial position, the company has requested a suspension of the trading of its shares on the London Stock Exchange."

Woolworths opened its first store in 1909 in Liverpool and has 30,000 staff. But the firm has seen shares crash 90% over the past year to stand at just 1.35p as fears over the business grow.

Restructuring specialist Hilco is said to have made an approach to buy the retail business for a nominal £1 and assume a large share of Woolworths' debt.

Woolies' net debt stood at £294.5 million at the beginning of August after a six-month trading period in which it made pre-tax losses of £99.7 million.

Any rescue deal is likely to depend on how tough a line is taken by the firm's syndicate of lenders, led by Bank of Ireland subsidiary Burdale Financial and GMAC Commercial.