Creditors of Baugur are trying to wrest control of some of the Icelandic group's biggest assets by putting much of the company that controls some of Britain best-known high street shops into administration in the UK instead of Iceland.

Landsbanki, the Icelandic bank, has appointed PricewaterhouseCoopers (PwC), the accountancy firm, to take control of BG Holdings, which owns stakes in or controls Hamleys, House of Fraser, Iceland Foods and Arum Group, which houses Goldsmiths and Watches of Switzerland.

This morning, Baugur announced it was on the brink of collapse, putting the future of many well-known high street names in doubt.

Baugur owns or has stakes in a long list of UK retailers, which also include Debenhams, as well as French Connection, Whistles and All Saints, the clothing stores.

Baugur was forced to seek protection from going bust from the District Court in Reykjavik after talks with Landsbanki collapsed over restructuring £1 billion worth of debt.

Baugur said today it has asked Icelandic courts for a three week stay of execution “to protect the group’s assets as well as the interests of all creditors”.

However, last night, Tony Lomas and Zelf Hussain, partners at PwC, filed an emergency petition with the High Court in London and the court will issue its ruling within the next five days.

Landsbanki will also continue to fight against Baugur’s application for a moratorium through the Icelandic Courts.

A spokesman for Landsbanki, said today: “Our discussions with Baugur Group did not produce any acceptable proposals, so we have taken steps to protect these valuable assets.”

House of Fraser today moved to calm investors and its customers over the future of its business.

It said: "During these difficult times, it is important to clarify the independence of House of Fraser and to emphasise that Baugur is a minority shareholder and has no impact on the strength of the business, or its day to day operations."

Don McCarthy, chairman of House of Fraser said: “This is sad news, however we can only continue to emphasise that the difficulties that Baugur faces do not affect House of Fraser’s trading or banking position. It is business as usual.”

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax