Terra Firma, the private equity firm, could become the owner of EMI this week, as it stands poised to secure the 90 per cent shareholder approval required by Citigroup, its financial backer, for it to commit more than £2 billion in funding to the deal.

Sources said that despite having been forced to seek an eleventh-hour extension from the Takeover Panel on Saturday, Terra Firma, which is owned and run by Guy Hands, was well placed to succeed in its £2.4 billion bid for The Beatles’ record label.

However, the deal will have come at a price, because the long-standing relationship between Terra Firma and Citigroup, already strained after the bank sought to renegotiate terms for the deal last week, was further tested at the weekend. Citigroup demanded that a full 90 per cent shareholder acceptance for the 265p-a-share bid be secured before it would approve funding – well above the usual 75 per cent asked for by financial backers. Last week, it emerged that Citigroup would not agree to a waiver if Terra Firma came close by securing even as much as 80 per cent approval.

Citigroup’s hardline stance has underlined nervousness on Wall Street as credit markets dry up amid the problems gripping the American sub-prime mortgage market.

On Saturday, as counting of shareholder acceptances threatened to go down to the wire - approvals were at 84.94 per cent by 5pm - Terra Firma decided that it could not count on a waiver from Citigroup. It won an extension for its bid from the Takeover Panel until 1pm on Wednesday.

Yesterday, sources close to the EMI bid said that Terra Firma had decided not to seek a formal waiver from Citigroup over the weekend. A source added that the bank had given “no opinion” when informed of the extension to the Takeover Panel deadline.

The source suggested that Terra Firma had fallen short of 90 per cent acceptance because some shares could not be tendered in time, having been bought after a trading frenzy on Thursday. Market rules meant that these could not be tendered for sale for three days. The source said: “Terra Firma are all but there.”

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