Hedge funds are competing with a number of British museums to purchase more than 5,000 artefacts recovered from the Titanic after the US company that owns the collection went bankrupt.

The British consortium, which includes the National Maritime Museum and Titanic Belfast, announced in July it would make a $20m (£15m) bid to acquire the collection, but it was reportedly unable to raise enough money to make an initial offer.

The hedge funds’ intervention will trigger an auction in October if the museums stay in the race – but the museums will have to place a substantially higher offer for items with an estimated value of $200m if sold separately. A US judge overseeing the bankruptcy case has ruled that they must be sold as a whole.

Their venture has the support of James Cameron, director of the 1997 epic film Titanic, the National Geographic Society and Robert Ballard, the former US naval commander who located the wreck site in 1985 and then led diving expeditions.

“I’m lending my voice to this campaign as it is the right thing to do,” Ballard said at the launch of the fundraising appeal in Belfast in July. “This bid is the only viable option to retain the integrity of the Titanic collection. The collection deserves to be returned home to where its journey began.”

However, a group of hedge funds – led by Apollo Global Management, which specialises in the purchase of property from companies in distress – have entered the running to buy the unique relics after launching a $19.5m bid.

Competing offers must begin at $21.5m and must be made by 5 October. If there are competing bids a bankruptcy auction will take place on 11 October, the Wall Street Journal reported.

Premier Exhibitions – the company that owns the items – used the water-damaged artefacts in travelling exhibitions after they were recovered from the seabed by deep-sea divers.

The collection includes parts of the doomed vessel, furnishings, expensive jewellery, and fittings from the ornate first-class rooms.

A judge overseeing Premier’s bankruptcy case ruled that they must be sold as a whole. It has been estimated that the items could fetch more than $200m at auction if sold separately.

“This may be the only time in history that this unique collection, with an appraised value of over $200m, will be made available to public buyers,” a Premier spokesperson told the WSJ.

The successful buyer will also assume the right to further salvage the wreckage site for further objects.

The Titanic sank on its maiden voyage in April 1912, leading to the deaths of more than 1,500 people.