The rescue deal for the Le Meridien hotel chain has suffered a major setback following a breakdown in talks between Lehman Brothers and the Royal Bank of Scotland (RBS).
It has been suggested that the hotel chain now faces a split, as the US investment bank is believed to have put forward an alternative plan that would see it join forces with Hyatt the US hotel operator.
This move would see the pair take control of Meridien's international operation and invest more than £100 million.
The plan excludes the 11 UK hotels leased from RBS which under the new plan would revert to the UK bank's control. The collapse of the original refinancing plan would mean that a key £16m rental payment due to RBS next week would not be met.
This would hand the bank control of landmark hotels in London, including Grosvenor House and Waldorf.