The $23 billion (£11.4 billion) sale of Virgin Media has been derailed by the crisis in debt markets.

The television and telecoms group conceded yesterday that its sale will be delayed for an unspecified time after it became the latest victim of the credit squeeze. The auction of the group, for which first-round offers had initially been expected today, is now on hold until a “more stable debt market environment” emerges.

The delay – which comes after a series of other failed or postponed debt deals, including the financing of the Saga/AA merger and KKR’s forced scrapping of plans to sell on the debt backing its £9 billion acquisition of Alliance Boots – means that the Virgin Media deal could drag on for months longer than expected.

Concern about the prospects of any deal being pulled had sent Virgin Media’s Nasdaq-listed shares down by 3 per cent to $23.01 in late morning trading – 19.7 per cent below the $28.67 mark that they hit when it emerged that an offer had been made.

In a further blow for Virgin Media’s investors, the cable group’s second-quarter results today are expected to show that up to 60,000 subscribers have quit as a result of problems in its fixed-line phone business.

Analysts believe that the heavily indebted cable group’s fixed-line phone division haemorrhaged subscribers in the three months to June.

Television subscriber numbers will be flat, analysts believe, as the impact of its long dispute with the rival BSkyB - the satellite broadcaster 39.1 per cent owned by News Corporation, parent company of The Times - kicks in.

Virgin Media, formed by a tie-up of NTL/Telewest and Virgin Mobile, hoisted the “for sale” sign last month after an approach from Carlyle, the US buyout giant.

Jim Mooney, the chairman of Virgin, has made a series of financial presentations to parties interested in the deal, which at Carlyle’s believed offer price of $33 to $34 and including Virgin’s £6 billion of debt, would be one of Europe’s largest leveraged buyouts to date.

However, volatility in the credit markets, which has been triggered by the collapse of the sub-prime loans market in the United States, threw into doubt the progress of the deal and the ability of private equity groups to raise the funds required. At present the banks are refusing to back such big leveraged buyouts.

Apax is understood to be the latest potential private equity suitor to go cold on the deal. TPG, formerly Texas Pacific Group, one of the world’s biggest buyout groups, has already pulled out of the auction.

However, in a statement, Virgin, whose biggest shareholder is Sir Richard Branson, with a stake of 10.5 per cent, insisted that it had received a “strong ongoing interest in a transaction” from both private equity and trade players. It said that its advisers, UBS and Goldman Sachs, had recommended the extension of the deal until bidders could complete their proposals in a more stable environment.

Carlyle is understood to remain intent on seizing its target. It is facing competition for the 4.8 million subscriber-strong group from another private equity consortium. involving Providence, Blackstone, KKR and Cinven.

Liberty Global, Europe’s biggest cable operator and a former shareholder in Telewest, is understood also to still be looking at Virgin Media – although it has yet to decide whether to lodge a formal offer for the group.

Last year an attempted sale of Virgin Media collapsed in part because of opposition from Bill Huff, the hedge fund investor, who was then a key shareholder in the group.

None of the private equity or trade parties involved would comment.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive