Although the distressed specialist Hilco was expected to buy the high street stalwart's retail arm for just £1, emergency talks between Woolworths' board and creditors this weekend over a finance package to either demerge the group or to keep its three operations together for another year are understood to have made little headway.

Steve Johnson, who took over as chief executive of Woolies in August, is understood to favour splitting the company, selling its 800 stores to Hilco, and retaining 2entertain, the profitable DVD publishing joint venture with BBC Worldwide, and EUK, Woolworths' wholesale distribution business, which supplies CDs, DVDs, games and books to rival retailers.

But a consortium of lenders, including the Bank of Ireland subsidiary Burdale Financial and GMAC Commercial, have so far refused to sign up to the deal, even though rescue talks which began last week have continued well into the weekend.

With shareholders, including Woolworths' largest stakeholder Ardeshir Naghshineh, opposing the sale to Hilco, Johnson has also been exploring a fresh financing deal to keep the company together. But with creditors unconvinced by either option, analysts say it is increasingly likely the retailer will be put into administration this week, ending Woolworths' love affair with the British high street just one year shy of its 100th anniversary.

Even if creditors do agree to an eleventh hour deal to back the demerger, analysts say Hilco is now likely to walk away after Woolworths shares tumbled 30% on Friday to 1.43p. Analysts at Altium Securities said on Friday that it would now be in Hilco's interests to let the company fall into administration and then pick and choose assets.

Analysts suggest Woolworths will be the first of a number of age-old high street names to be consigned to the history books over the next 18 months as sales continue to falter. Desperate tactics such as Marks and Spencer's one-day 20%-off sale are expected to continue in the coming weeks as fears grow for the Christmas period, traditionally the time when retailers make most of their money.

M&S chief executive Sir Stuart Rose said last week's sale "touched the spot" with cash-strapped shoppers, and analysts are predicting a number of copy-cat sales elsewhere in weeks to come.