The turmoil on global debt markets claimed another victim yesterday when Whitbread disclosed that it was delaying a possible £1 billion bond issue.

The group, which runs the Premier Inn chain and Costa Coffee outlets, said that while it intended to raise new debt secured against its hotels and restaurants, the move would be “foolish” in present market conditions.

Christopher Rogers, finance director, said: “The propensity to lend to anyone but a sovereign government is very low at the moment. Our advisers told us that ‘unless you have to, our advice is that you shouldn’t go at this time’.”

Gazprom, the Russian gas group, Power Finance Corp, of India, and Dana Gas, based in the United Arab Emirates, have all delayed bond issues in the past month, blaming high yields or weakness in global credit markets.

Whitbread’s bond issue had been expected to provide the bulk of a widely expected £900 million cash return to shareholders.

Yesterday the group would commit itself only to starting a £300 million share buyback programme, funded largely by the proceeds from the sale of David Lloyd Leisure in June. It refused to quantify the potential size of the bond issue, but analysts said that it could surpass £1 billion easily, providing the funds for a £600 million special dividend and extra cash for the continued expansion of Premier Inn and Costa Coffee.

Whitbread has said that it wants to increase its leverage to five times underlying earnings, a target of about £1.8 billion.

Alan Parker, the chief executive, said that an update would come at interim results in mid-October. He added: “We have been advised it would be foolish to go at this time, but we are talking a matter of weeks here.”

Despite the setback, the shares climbed more than 3 per cent, or 54p, to £16.12p after a trading statement revealed that sales growth was accelerating across the Whitbread estate.

Premier Inn registered like-for-like growth of 12 per cent in the 11 weeks to August 16, with sales at Costa Coffee up 10.2 per cent. Group like-for-like growth stood at 7.8 per cent.

Mr Parker said that Premier Inn’s performance was “sparkling” and the chain could follow Costa Coffee into China. He said: “China could well be an opportunity. We have a number of irons in the fire.”

Mr Parker added that Costa Coffee was on track to hit 1,000 outlets by 2010. The 600th site opened recently in Wimbledon, southwest London, and the new site programme is targeting the greater London area and market towns across the UK.

Mr Parker said: “There may be some belt-tightening by consumers this autumn, but there is no sign of like-for-like growth tailing off.”

Geof Collyer, analyst at the house broker Deutsche Bank, upped his full-year earnings forecast by 10 per cent. He added: “Everyone knows what is going on in the debt markets. When they reopen, Whitbread will be at the front of the queue.”

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