Britain’s biggest shopping-centre owner has now confirmed it has put administrators on standby.

intu Properties has warned its shopping centres across the UK may close if it is forced to call in administrators.

Earlier reports suggested that administrators KPMG were put on standby if lenders fail to agree for an extended time period for intu to repay its debts, which has now been confirmed.

It is suggested there has been “progress made” with lenders, but intu are still seeking a standstill agreement to provide breathing space of its debts of £4.3 billion, with a deadline of Friday (June 26).

intu said: "Not withstanding the progress made with lenders, intu has also appointed KPMG to contingency plan for administration.

"In the event that intu Properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration.

"In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres.

"If the administrator is not pre-funded then there is a risk that centres may have to close for a period."

intu is hoping to arrange a so-called standstill agreement on terms of up to 18 months but said at this stage it is unlikely to be more than 15 months.

It cautioned that if it cannot reach an agreement and is placed in administration, then without critical up-front funding from its lenders, "there is a risk that centres may have to close for a period".

The company was not in the best shape financially before the coronavirus pandemic, but the situation has worsened because many retailers have chosen not to pay intu rent whilst the shops have been closed.

Lakeside in Essex and the Trafford Centre in Manchester are two examples of shopping centres wholly owned by intu - however intu does not own the former Harlequin in Watford outright.

Watford Borough Council has a 7 per cent stake in intu Watford, and intu has the remaining 93 per cent.

The council also has the freehold on the intu Watford site.

According to Watford Council, if intu were to go into administration, the receiver would still have to continue to comply with the lease terms whilst running centre, including paying rent to the council.

The receiver would likely look to find a buyer for the lease which would mean intu Watford could continue to stay open.