The founder of Baugur admitted that he will lose control of the retail group that spans the House of Fraser department store chain and the Hamleys toy retailer if a planned deal with UK entrepreneur Sir Philip Green, owner of Topshop, goes ahead.

As reported in the Financial Times, Sir Philip made an intervention into the Icelandic crisis on Friday, flying to Reykjavik to negotiate with government ministers over buying Baugur's debt held by failed Icelandic banks, which is believed to have a combined face value of about £2bn.