Suppliers are coming under mounting pressure to increase their debt levels in order to meet renewed demands from retailers for extended payment terms.

Investec Growth & Acquisition Finance has noted a surge in demand from suppliers hampered by negative working capital. "Management teams are starting to be concerned about pressure that may or may not come from major customers extending terms," said Investec GAF head Gary Edwards.

"We didn't hear this six months ago, even at the height of the recession, but it's now becoming common. Suppliers are experiencing it directly or starting to build in the possibility."

Typical terms for major suppliers ranged between 30-60 days but were negotiable, said David Sables, CEO of management consultant Sentinel. For smaller suppliers, these could stretch to 90 days if goods were less sought after.

Own-label suppliers were under particular pressure, added Duncan Swift, head of agrifood at RSM Tenon.

Extensions to payment terms were only the tip of the iceberg, said a supplier source, with delays on taking ownership of goods another tactic. "It's not just the length of time to pay," he said. "There are other criteria including fines if you don't deliver on time, but they might add fines if you arrive too early into RDCs. The month before the new code of practice was introduced, every single retailer, bar Waitrose, was trying to change its terms of business in some shape or form the worst being Asda and Morrisons. Recently it's been the Co-operative Group and Asda."

Another supplier claimed it had faced similar pressure from the Co-op Group and M&S.

Morrisons said standard terms and conditions remained unchanged but acknowledged specific negotiations might have arisen "as part of usual trading".

Asda and M&S said no further corporate changes to credit terms were planned in the short term and the Co-op Group stressed that its efforts to pay in accordance with terms agreed.