United Co-op has pulled out of talks with London & Regional, a consortium preparing a £1bn bid for Somerfield.

The Co-op had been in talks with the consortium to discuss the possibility of buying 500 Somerfield stores if London & Regional’s bid was successful.

Reports suggest that United’s withdrawal could put London & Regional’s bid in jeopardy, clearing the way for a rival consortium led by Apax Partners to bid for Somerfield.

In July this year United Co-op pulled out of the bidding war for Somerfield after expressing its own interest in the supermarket group.