Potential buyers could include as many as eight parties, among them Fortress, the US investment firm behind Poundstretcher, the owner of The Range, and B&M.
However, one industry insider warned that as many as 500 of the 600 stores could be left without a buyer in the event of a break-up, resulting in massive job losses.
Joanne Thomas, general secretary of the Union of Shop, Distributive and Allied Workers, urged ministers to intervene. “I am calling on the government to do everything it can to save 11,000 jobs, which are mainly done by women and part-time workers,” Ms Thomas said.
Business Secretary Jonathan Reynolds has instructed his chief strategic business adviser, David Bickerton, to contact Gordon Brothers and “establish the facts” surrounding the potential collapse.