Deloitte & Touche was reported yesterday as saying it was "confident of salvaging Woolworths, although in a slimmed-down form of between 250 and 400 stores, less than half its current size".

Neville Kahn, partner at Deloitte who is leading a 100-plus team working on the administration and potential sale of Woolworths, said: "We remain very confident that we can sell the business to someone who will keep it as a going concern.

"We have commitments to keep Woolworths trading until after Christmas, by which time we should have a buyer."

Retail entrepreneur Theo Paphitis was widely reported yesterday as being among a dozen or so interested parties in the fire sale of the 800-shop chain which employs 30,000 across the UK.

One report said Paphitis had a "tentative" interest in salvaging profitable stores. Another said Tony Page, who runs the stores division, was in talks with financial backers over a possible management buy-out.

Discount store Poundland along with Tesco, Sainsbury, Asda, the Co-operative and Iceland had all expressed interest, the report added, while Woolworths' biggest shareholder Ardeshir Naghshineh was said to be planning a bid for the whole group.

Naghshineh, whose 10% stake was wiped out in the administration last week, is thought to be hatching a rescue plan which would include the disposal of key leases to rival retailers and the sale of the retailer's stake in 2Entertainment, a DVD publisher, to the BBC.