The management of a number of Baugur-backed retailers are putting plans in place to buy back equity and debt now controlled by the Icelandic government.

Management of House of Fraser, Mosaic, Iceland and Jane Norman are understood to be considering mounting their own bids for the retailers.

Mosaic chief executive Derek Lovelock said: “The business has sufficient funding in place to meet all foreseeable obligations.”

He added: “We continue to work closely with our colleagues at Baugur and have held talks with a number of parties, but would like to make clear that none of these have reached a conclusion. We are obviously encouraged, but not surprised by, the significant interest in our business, which has a strong management team and portfolio of brands.”

Following the collapse of Iceland’s banking system, the Icelandic government controls the debt connected to Baugur’s investment as well as the bank’s stakes in the retailers.

Sir Philip Green is one of a number of parties circling Baugur’s£2 billion debt, including private equity firms Permira, Alchemy, TPG and Blackstone.

Entrepreneurs trying to do business in Iceland have been hampered by confusion over who owned the Baugur-backed companies’ debt and equity. They are also frustrated by Iceland’s stalled payment system, which has caused foreign exchange to dry up in the country.

The retailers’ futures are also becoming increasingly politicised as the relationship between the UK and Iceland remains strained. Green has reportedly approached Gordon Brown, the business secretary Lord Mandelson and Treasury officials to ask them to support his move for Baugur.