Woolworths' potential saviours will meet administrators today for a second round of talks to try to save the ailing retailer, with a deal hoped to be done by the end of the week.

Those meeting Deloitte at Woolworths' London headquarters will include Theo Paphitis, the Dragons' Den entrepreneur, who emerged this weekend as a potential bidder.

Mr Paphitis, before becoming a judge on the television programme, led the recoveries of the Ryman and La Senza chains. He is said to be interested in buying a number of Woolworths' more profitable stores after meeting administrators on Friday.

The administrators met a large number of interested parties last week and talks today are set to narrow the field down to the remaining serious contenders.

Ardeshir Naghshineh, Woolworths' largest shareholder, will propose plans to take control of the entire group, including EUK, its CD and DVD distribution business, and

2Entertain, its publishing joint venture with the BBC. Mr Naghshineh, an Iranian property tycoon, was meeting potential backers of his plans yesterday and is understood to want to turn the company into an employee-owned business in the mould of John Lewis.

Another front-runner to buy the beleaguered business is Tony Page, who runs the retailer's stores division, and is thought to be putting together a bid with other members of its retail management.

Other retailers are casting an eye over the chain's stores, with Tesco and Waitrose believed to be interested in buying some of Woolworths' shops to increase their own presences in the high street. Both have already bought leases from Woolworths.

Woolworths' collapse into administration last week came against a backdrop of falling spending, with fewer people making a trip to the shops.

Latest figures from Experian's retail footfall index, released today, show that 0.9 per cent fewer people went shopping in November, compared with a year earlier, despite heavy discounting and special promotions, of which more are expected this week. Scotland was the worst-hit region in the UK, with retail footfall down 5 per cent.

Experian also said that the number of retail business failures rose 21 per cent in November, compared with the previous month, including Woolworths and MFI, the furniture chain.

Jonathan De Mello, the director of Experian's retail consultancy, said: “From a UK-wide perspective, it seems efforts at deep discounting have failed to attract significant shopper numbers into stores.” Worse still, he said, deep discounting may have brought forward shoppers from December into November and set back the traditional Christmas rush by at least a week.

However, it is also possible that purchases of big-ticket items, such as televisons, have been delayed until the Government's lowering of VAT by 2.5 percentage points to 15 per cent takes effect this morning. Staff of most of the big retail chains, such as Marks & Spencer and John Lewis, have worked around the clock to ensure that their prices reflect the lower tax level.

Patrick Lewis, director of retailing for John Lewis, whose sales fell 13 per cent last week, said that it was probable that consumers were holding off big purchases until they were sure that VAT reductions would be in place. He added that it had been an enormous task to change prices and that, in many cases, the chain had cut prices by more than it had to, so as not to end up with weird prices.

Mr Lewis said that the exercise would end up costing the chain millions of pounds, adding: “I dread to think how much it has cost.”

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