Euler Trade Indemnity is understood to have cut Polestars cover across the board, with the exception of one paper supplier, after Polestar failed to supply certain financial information.

The move has major implications for Polestar and its trading partners, but chief executive Barry Hibbert moved quickly to stem speculation about the firms future: "We are not going down the pan in fact were going in the opposite direction. Sales are picking up nicely and we have a full order book in most plants.

"This is a legacy from before our refinancing. We didnt get the information to them its purely a communications issue. It will take us a few days to get this sorted," he stated.

Polestar has also been hampered by the illness of group finance director Malcolm Robertson, who has been off work for six weeks.

The groups results to September 2001 will not be released for at least another month, after being delayed by the refinancing and a financial revamp instigated by Hibbert when he joined the group last August.

"I wanted us to be more prudent on the balance sheet and take some provisions for bad debt, etc. Getting that level right has caused the delay," Hibbert explained. "We will have more robust policies going forward, but the accounts needed a tidy up.

"We had our recession last year, before the refinancing," he added. "Our gloomy forecasts have been borne out, but we had factored that in."

Hibbert said the group had a "two-year window" to improve cash throughput, efficiencies and reduce costs. In his first major interview since he returned to the group, Hibbert also tackled the thorny subject of Polestars future: "Will we float? Who knows? The refinancing was a new beginning. Consolidation is needed in this industry and we dont operate in isolation. I dont rule out anything."

Story by Jo Francis