Sir Philip Green is seeking assurances that regulators will abandon a probe into‎ BHS's vast pension deficit if he makes a "voluntary" financial contribution to the retirement pots of thousands of the collapsed chain's former employees.

The subject has arisen during discussions between the two sides, sources indicated this weekend.

Opinions differ about whether the watchdog would be willing or able to offer such a guarantee to Sir Philip, with sources close to it suggesting that every case "would be evaluated on its merits".

The regulator can also‎ seek information from or pursue anyone who they believe to be a connected party - which in BHS's case could lead it to Lady Green, the ultimate owner of Taveta, which owns Arcadia Group.

One ally of the Topshop billionaire said: "This would be a voluntary contribution, and it would be unrealistic to expect it to be made unless the anti-avoidance probe was discontinued."


The precise sum that Sir Philip will have to contribute remains subject to weeks or even months of further negotiations, although experts say that it will be at least £300m based on‎ talks so far.

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The tycoon promised to "sort" the deficit when he appeared before MPs in June, although he has since been criticised by parliamentarians over the lack of visible progress.

Lesley Titcomb, the Pensions Regulator's chief executive, said in May that the anti-avoidance inquiry had been launched shortly after Sir Philip sold BHS for £1 to a consortium led by Dominic Chappell, a former bankrupt.

This weekend, the final BHS stores close across the UK, bringing the curtain down on another of the country's best-known high street names.

Approximately 11,000 people have seen their jobs disappear as a result of the collapse, with Sir Philip shouldering much of the blame in a critical report published by MPs last month.

‎The most recent valuation of BHS's pension schemes put the deficit at £571m on a buyout basis, but that figure has since risen by an undisclosed amount because of shrinking returns from government bonds as interest rates fall to new lows.

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Sir Philip and the Pensions Regulator are edging forward in their talks about a solution, which is currently structured along similar lines to 'Project Thor', a proposal discussed at length when the tycoon still owned BHS.

Under the plans, thousands of scheme members would be offered the chance to exchange their existing pension pots worth roughly £15,000 or less for a cash sum.

That would reduce the scheme's liabilities substantially, while future increases to pension payments would be reduced under the current proposals.

The two existing BHS schemes will be rolled into a single independent trust, according to a person familiar with the proposals.

Although the benefits to ongoing members would exceed those payable by the Pension Protection Fund, a lifeboat for the employees of stricken companies, they will be lower than those which would have been paid if BHS had remained solvent.

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The PPF will also be required to give its consent to any new pension deal‎ because BHS's pension schemes are currently in a formal assessment period, sources said.

A spokesperson for The Pensions Regulator said: "Our focus is on achieving the best possible outcome for members of the BHS pension scheme and PPF levy payers.

"Our discussions with Sir Philip Green and his advisers are ongoing."

Referring to its anti-avoidance investigation, the regulator's spokesman said: "Our anti-avoidance investigation continues and our chief executive has given a clear commitment that we will have made significant progress by the end of 2016.

"It's important that we do not prejudice this complex case and are able to progress it quickly."

A spokesman for Sir Philip declined to comment, while the regulator declined to comment further.