The company that owns the Jamies wine bar chain is understood to have lost its fight for survival and is expected to call in the administrators. A spokeswoman for FDG declined to comment.

Food & Drink Group (FDG), which has about 30 bars and 17 franchises, mainly under the Jamies and Henry J Bean's brands, is understood to be in talks with two potential buyers of the whole business, while other parties are keen to cherry-pick sites.

A month ago, FDG, many of whose outlets are in the City of London, asked for trading in its shares to be suspended on AIM while it attempted to resolve the financial crisis precipitated by April's dire warning on profits.

In a statement at the time, it said was "in discussions with providers of finance to procure sufficient additional funding to secure the immediate future of the business", adding: "There can be no guarantee however that these discussions will lead to a favourable outcome for FDG."

One of the options FDG had been looking at is a reverse takeover of 3D Entertainment, the bar operator in which Luminar, the nightclub operator, has a 49 per cent stake. Stephen Thomas, the FDG chairman, is also chief executive of Luminar.

According to M&C Report, an online newsletter, FDG is likely to be sold via a so-called pre-packaged administration that will see all the group's senior debt and some of its subordinate debt covered.

However, ordinary shareholders, who have seen the value of their holdings dive by 96 per cent over the past 12 months, are unlikely to receive anything. The shares were suspended at 10.25p, valuing the equity at just £581,000 against a debt burden of at least £9 million.

The collapse into administration, which will be handled by BDO Stoy Hayward, will be a disappointment to Mr Thomas, who became chairman in 2000 as part of an ambitious turnaround strategy.

The group, previously called Hartford, had enjoyed a high profile through its ownership of Pharmacy, the trendy Notting Hill eaterie decked out by the artist Damien Hirst, but a series of profit warnings sparked a strategic and financial overhaul.

But the gradual restoration of its fortunes was halted by factors including the smoking ban and the consumer spending downturn. FDG put itself up for sale at the start of this year after being foreced to admit that it was too small to prosper on its own in the current climate.

Novus Leisure, Premium Bars & Restaurants and Agilo, the distressed debt specialist, have all run a sliderule over some or all of the FDG portfolio.

FDG is the latest in a string of corporate failures in the pub and restaurant sector in the wake of the toughest trading conditions since the recession of the early 1990s.

Recent victims have included the Laurel Pub Company, CanDu Entertainment, Sports Cafe Holdings and the Massive Pub Company.

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