More than 1,800 jobs were hanging in the balance today as ChoicesUK, the high-street DVD rental chain, said it was heading into administration.

The group, which runs 170 stores across the country, said it had failed to secure a refinancing agreement acceptable to its bankers, Lloyds TSB.

The directors have been in negotiations with potential lenders and buyers for the past two months.

Anthony Skitt, chief executive, told Times Online that he was confident a buyer could still be found for the business and that jobs would be saved.

He said: “I’m very optimistic that this business will not be in administration for very long.

“We’ve had a lot of discussions over the past eight to twelve weeks so there’s a lot of people that have crossed our path.

He added: “From September, we would have needed a lot of cash for the run-up to December and it became clear the only option was to go for administration.

“I thought we had found something that might have been acceptable but the bank, which in fairness has been very supportive, didn’t agree.”

An administrator, understood to be PriceWaterhouseCoopers, is expected to be formally appointed tomorrow.

ChoicesUK is the UK's second-biggest chain behind Blockbuster in the £330 million DVD rental market, which has gone into meltdown in the past two years given film piracy and increased competition from online rental firms.

The group was in the middle of a restructuring plan to close 50 stores after a sharp downturn in trading. It was expected to run-up losses of £4.6 million this year. Debts are thought to have snowballed to £13 million.

In April, ChoicesUK shares collapsed 50 per cent as Mr Skitt warned that the group would "substantially" miss financial targets this year.

At the time he said it was unlikely there would be any standalone rental stores left in five years' time.

He said: "Clearly, standalone stores are becoming less viable. That's as plain as the nose on your face."

Today he said that coupled with the banks' nerves, suppliers were becoming increasingly cautious. "And they represent our two blood lines," he said.

ChoicesUK shares were suspended at 10.25p, valuing the group at £1.9 million. They were trading at 240p at the end of 2003.

Richard Ratner, analyst at Seymour Pierce, said while the timing of ChoicesUK's collapse was a surprise "we cannot say it has come as a shock".

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