A sharp rise in the number of stores being shut by distressed retail groups is fuelling fears that chunks of Britain’s high streets and shopping centres will be left as ghost towns by the deepening recession, which was officially confirmed yesterday.

Concern mounted that a rising tide of premises being closed will bring desolation to large tracts of shopping centres after new figures underlined the extent of the trend.

PricewaterhouseCoopers, the accounting group, said that Britain was at risk of developing a phenomenon of “grey malls”, mirroring the retail wastelands of closed premises springing up across the United States.

“In recent years we’ve had coffee shops, mobile phone shops and charity shops filling the voids. Apart from pound shops, what’s the next thing that’s going to fill them?” Barry Gilbertson, a corporate restructuring expert at the accounting group, asked.

“Keeping tenants trading is more important than getting in a dribble of cash, particularly in a shopping centre.” Among retailers forced into administration, the proportion of stores that has already been shut has climbed to 43 per cent, according to research by PwC. If only 10 per cent of national retailers slide into financial difficulty as the recession bites deeper this year, that could mean the closure of 4,400 stores.

If big retail chains were forced to close two in five of their premises, as has happened with the businesses already in administration, the total would climb towards 9,000.

The surging number of premises being boarded up for the long term, seen most dramatically with the closure of 500 Woolworths stores, comes against a worrying backdrop of strife between retailers and their landlords.

As the recession undercuts consumer demand and the plight of retailers deepens, a growing number of stores groups are resorting to renegotiating rental payments and seeking to pay monthly rather than quarterly.

The financial toll on the economy from closed shops is hard to quantify precisely but PwC projects that if 20 per cent of store premises are left empty that could cost landlords up to £1.4 billion.

The plight of retailers was high-lighted yesterday as Sofa Workshop called in administrators, and Greenwoods Menswear, a fashion chain, was sold to a Chinese retailer.

Alarm over the fallout for retail groups from the economy’s slide and faltering consumer spending was magnified by yesterday’s bleak GDP figures, which confirmed that the economy shrank by 1.5 per cent in the past three months, its sharpest decline for almost three decades. Analysts fear that slumping growth and spiralling unemployment will trigger an imminent collapse in consumer demand, further aggravating Britain’s economic misery.

Stronger than expected official retail sales figures, suggesting a 1.6 per cent leap in the quantity of goods sold last month, caused surprise in the City, confounding other signs of much weaker trading. The strength of the figures suggested that retailers resorted to aggressive price-cutting to shift their goods and boost sales. However, the Office for National Statistics cautioned that the figures were distorted by rogue factors. Economists said that a more accurate gauge lay in the unadjusted cash value of sales last month, which sank by 0.8 per cent from a year earlier, suggesting that a consumer retreat has begun.

“Retail sales growth is defying gravity,” Alan Clarke, of BNP Paribas, said. “At some point, the discounting will have to end and spending growth will fall sharply into negative territory.”

Shares, gilt-edged stocks and the pound succumbed to another battering in early trading yesterday as markets absorbed official confirmation of recession. The pound tumbled to a new 23-year low against the dollar, hitting $1.35 before clawing back ground. Prices for long-gilt futures were hit by the sharpest one-day falls driving their yield on record.

But the FTSE 100 rebounded to close down only 7.6 points after sentiment was boosted when President Obama appeared to be on course to win approval by mid-February for a new stimulus plan to jump-start the American economy.

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