Woolworths will hold its biggest sale today after Theo Paphitis, the Dragons’ Den entrepreneur, walked away from a bid for the collapsed retail chain.

Deloitte, the administrator of Woolworths’ 815 high-street stores, is cutting prices by as much as 50 per cent.

Neville Kahn, a partner at Deloitte, said: “We anticipate increased footfall in the stores and have hired additional staff to cope with increased demand. Additional goods have been moved to all stores and further stock will be added in the coming days.”

The 99-year-old pick ‘n’ mix retailer, which has already seen footfall in its stores soar since it was put into administration last week, will cut 50 per cent off the price of toys and greeting cards and 30 per cent off Christmas trees and decorations.

The sale comes after Mr Paphitis pulled out of a bid for Woolworths’ stores. He had planned to bid for a significant chunk of the retailer’s portfolio of stores but said yesterday that it had not been possible to reach a deal with Deloitte.

Mr Paphitis’s decision to quit the race raised fears that Deloitte will sell most of the stores in small groups to many different bidders.

The deadline for bids for single or small groups of Woolworths’ stores was 4pm on Wednesday. CB Richard Ellis, the property adviser running the auction, received a high number of bids with Tesco, Waitrose and Asda believed to be interested in a small number of stores.

But despite the Dragons’ Den star’s decision to pull out of the race, Mr Kahn insisted he had received “substantial expressions of interest” in the stores and Entertainment UK (EUK), its CD and DVD distribution business.

Meanwhile, Sir Richard Branson’s Virgin Group has become embroiled in the implosion of Woolworths and could be liable for up to £70 million. The link comes through Zavvi, the music chain formerly owned by Virgin. Zavvi owes Woolworth’s wholesale division up to £70 million for Christmas stock. Under the terms of the buyout deal Virgin did with management last year, it agreed to guarantee Zavvi’s payments to Woolworths for stock.

However, people close to the situation said that Zavvi would be well able to pay what it owes to Woolworths because the goods it is yet to pay for will be sold over the Christmas period.

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