Speculation grew that Milestone Resources might be planning a takeover bid after it increased its holding in the struggling chain from 8.4% to 9.1%.

Debenhams, which has 136 stores in the UK and Irish Republic, has previously been the subject of bid rumours.

Its shareholders include Icelandic group Baugur, which holds a 13% stake.

In July last year, Baugur said it did not intend to bid for Debenhams and would not increase its holding above 30%, which requires a bid to be made under stock market rules.

Earlier this month, Debenhams reported a 2.2% rise in like-for-like sales over the four-week Christmas trading period, but added that it was cautious about its prospects in the face of "fragile" consumer confidence.

Milestone is an investment group linked to Dubai-based retailer Landmark, which has more than 600 shops in India, Spain and the Middle East. Both companies are headed by Indian-born entrepreneur Micky Jagtiani.