Billionaire businessman Sir Philip Green is looking to invest up to £2 billion to save troubled Icelandic retailing group Baugur.

Sir Philip has held talks with the Icelandic government about buying the debt held by the group in the country's collapsed banks.

The group's brands in Britain include House of Fraser, Karen Millen and Hamleys.

Sir Philip, who owns some of the UK's biggest retail chains including Bhs and Topshop, described the Baugur businesses as "fundamentally sound".

He flew to Reykjavik on Friday to meet bank chiefs and government ministers.

He said: "There was a discussion about my company acquiring the debt in these different banks."

The debt is thought to be between £1 billion and £2 billion.

Sir Philip said he was waiting to hear in the next 24 hours whether there was interest in his plan.

He said business at the moment was "not too bad" and was more affected by the weather than the economic turmoil.

But he said the "barrage" of negative news was "fundamentally unhelpful" to economic recovery.

"We have not yet seen significant corporate collapse. We haven't seen significant unemployment," he said.

"Do I think there are some pressures in the economy? Of course there are. But if we keep frightening everybody and terrorising everybody it will feed on itself."

He continued: "Things find a level. I think the market was probably being driven too fast, too far with too much credit being available in the first place."

He described the situation as "unprecedented", adding: "Everybody needs to get supportive of whatever actions get taken, to try and calm the waters for us to get back to something normal."

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