Retail entrepreneur Theo Paphitis has pulled out of bidding for variety store group Woolworths, which was placed in administration last week.

The Dragons' Den star's withdrawal will be a bitter blow for Woolworths' 30,000 staff, although other parties still remain interested in buying the chain and continue to talk to administrator Deloitte.

Unless a deal is struck, Woolworths is likely to be broken up and its stores sold off in parcels to other retailers.

Paphitis said: “Following intensive discussions with Deloitte, it is with disappointment that I confirm we could not reach a deal.

“Unfortunately, the constituent parts of Woolworths are more valuable than the whole. The administrators have a difficult job to do and I appreciate that they need to get the highest cash value for the business.

“I hope that an alternative proposal succeeds in securing the future for the many Woolworths employees involved.”

Deloitte said: "We continue to hold discussions with a number of parties interested in buying Woolworths and EUK as going concerns, including a number of new parties which have approached us in the last few days.

"We are working as quickly as possible to assess proposals. We continue to work hard to ensure that any sale of the business, in whole or part, will preserve jobs."

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