The OFT launched a consultation this week into whether The Co-operative Group's merger with Lothian Borders & Angus Co-op would reduce competition - in a move that could force the society to sell off yet more stores.

The OFT said it would examine whether the merger, agreed in October, would "result in a substantial lessening of competition within any market or markets in the UK for goods and services that warrant reference to the Competition Commission for investigation".

It is already working with The Co-op to sell off 133 stores as part of the society's £1.57bn acquisition of Somerfield. However, the merger with Lothian could complicate matters because The Co-op has already been asked to sell five Somerfields that compete with a Lothian store.

The Co-op is widely expected to co-operate with the OFT to push the Lothian merger through. When it merged with United Co-op last year it sold eight stores to avoid competition issues.

Meanwhile, Waitrose denied reports it was in talks to buy 13 The Co-op stores.

Spar wholesalers AF Blakemore, Capper & Co and Appleby Westward said they planned to buy six stores and indicated Spar wholesalers and retailers may be interested in further sites.