Major lender Royal Bank of Scotland has withdrawn from talks about a proposed debt-for-equity swap with retailer Peacocks, pushing it closer to bankruptcy.
The clothing retailer has £240 million of debt, and it is believed it will fall into administration within days.
A spokeswoman for Peacocks, which trades from 611 Peacocks stores and 394 Bonmarche shops in the UK, employing about 10,000 people, said discussions among stakeholders regarding the restructuring of the debt were continuing.
She declined to comment on media reports the firm had lined up KPMG to carry out an administration, an insolvency process. KPMG also refused to comment.
State-controlled bank RBS withdrew from talks to turn some of the company's debts into equity holdings in the company after taking account of the retail sector's poor performance since Christmas, including last week's profit warning from Tesco.
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