Chief executive Malcolm Walker now considering plans to buy up parts of the Baugur-owned frozen food chain.
Iceland ceo Mr Walker is reported to have withdrawn his £50m offer, which was rejected by Woolworth's chairman Richard North in August. Talks between the two men are said to have ended two weeks ago with no further meetings planned.

Instead, Mr Walker is now turning his attention towards a stake in the Iceland chain that he runs following financial trouble in the Icelandic market.

He will follow in the footsteps of Sir Philip Green who is in talks with the country's government to buy up Baugur's debt, held in the failed Icelandic banks.