Fears that a wave of high street retailers will go bust drove a frenzy of price cutting yesterday as shops made a desperate attempt to entice customers to spend.

Prices were slashed by up to 90 per cent in department stores, fashion outlets and supermarkets across the country for the Boxing Day sales, evidence of the growing sense of crisis in the retail sector.

Retailers called for an urgent government bailout to match financial assistance given to the banking sector and the auto- motive industry to protect three million jobs.

Yesterday hefty discounting, the only option available to shift stock urgently and raise much needed cash, resulted in one of the busiest shopping days in living memory.

Thousands of bargain hunters formed queues outside stores from the early hours of the morning and many shopping centres reported higher footfall rates than during last year’s sales.

Selfridges, the Oxford Street department store, turned over almost £1 million between 12pm and 1pm — the most successful hour in the store’s 100-year history.

But despite the huge customer turnout, experts warned of grim times ahead and said that more than ten retail chains risked going under next month.

The British Retail Consortium (BRC) called on the Government to support the industry to avert a wave of bankruptcies. Woolworths, the most high-profile of them, will close a quarter of its stores today. On Christmas Eve, as surveys suggested that trading was at its worst levels in 25 years, Zavvi, the music, games and DVD chain, went into administration.

Jason Gordon, retail director at Ernst and Young, said that retailers faced further difficulties in the coming months, including planned tax increases in April. Buying capacity is also being undermined by the weakness of sterling.

Mr Gordon told The Times: “We will certainly see a higher level of profit warnings and companies going into administration in the next year. There are a whole host of challenges for the retailers that survive the first quarter.”

Yesterday the Centre for Economics and Business Research warned that the UK economy would suffer its worst fall since 1946 next year.

Richard Dodd, of the BRC, said that retailers had “no choice” but to discount heavily. “Quarterly rents were due yesterday and a lot of retailers have to find the upfront cash this week,” he said.

Analysts warned that some retailers would be forced to continue discounting into January, and possibly February. The sales continue today.