A retail group which has major stakes in a raft of high street chains with stores in Bristol is on the brink of administration.

Investment company Baugur, which is based in Iceland, is struggling under the burden of a £1 billion debt and has applied for protection from creditors.

The House of Fraser group, in which Baugur has a 34 per cent stake, has the anchor store in the £500 million Cabot Circus development where it has 350 staff.

Baugur also owns 14 per cent of frozen food chain Iceland, which has 10 stores across Bristol and 36 per cent of fashion label All Saints, which has two Bristol branches.

The firm's interests also include minor stakes in other names including Coast, Karen Millen, Oasis, Principles, Warehouse and Shoe Studio, as well as equity stakes in other listed retailers such as French Connection and department store chain Debenhams.

Fears for Baugur's future mounted on Wednesday after talks with banks over the debt collapsed.

Baugur also has stakes in toy store Hamleys, jewellery chain Goldsmiths and fashion store Whistles.

Baugur employs around 50,000 people worldwide in more than 3,500 stores, with a total turnover of £5.4 billion.

The struggling group has applied to enter the "moratorium" process in Reykjavik – which offers protection from creditors in a similar fashion to Chapter 11 bankruptcy procedures in the US.

The group has an initial three weeks to find a way forward, but its current woes could mean a fire-sale of its UK retail assets.

Baugur has been hit by the drying up of credit caused by the collapse of Iceland's banking sector, which has affected its ability to borrow money.

It has also been hit in recent months by withdrawal of cover by credit insurers.

Credit insurance is taken out by suppliers, especially to the retail sector, to insure against non-payment by the stores they are supplying.

If suppliers are unable to take out such insurance, they find it even more difficult than usual to take out loans from banks.

But one credit insurer has predicted that the retailers will be able to continue trading, despite Baugur's protection from creditors.

A spokesperson for the credit insurer Altradium said: "[We] remain supportive of the viable businesses trading within it, notably some of the well known names on the British High Street.

"We do not foresee that Baugur's shareholding will negatively impact the ongoing trade of these businesses and anticipate the transfer of shares in an orderly fashion."