Troubled holiday operator MyTravel is reported to be in talks over a possible buy-out, as executives struggle to retain investor and customer faith in the business.

According to the Sunday Times newspaper, the firm - previously known as Airtours - is talking with venture capital firms over a possible agreed bid worth up to �750m ($1.2bn), while the Sunday Telegraph said a management buy-out was in the works.

The reports came after a devastating week for MyTravel, which saw its shares lose three-quarters of their value after it warned on profits, scrapped its dividend and talked of accounting problems.

According to other newspaper reports at the weekend, MyTravel now has liabilities of �1.5bn, and may soon lose business worth �50m as customers rush to cancel no-deposit booking.

Money worries

According to the Sunday Times, directors of MyTravel have already held preliminary talks with venture capital firms 3i Group, Permira and CVC Capital Partners.

Talk of a sale comes as little surprise after last week, but with the reliability of the firm's accounts still in question, putting together a deal quickly may not be easy.

Fears over liabilities, largely stemming from a complex refinancing deal three years ago, could also imperil ongoing efforts to inject more capital into the business.

The Observer newspaper reported that there was scepticism over the firm's ability to raise the �480m it needs to to keep itself going for the next two years.

As a consequence, the Civil Aviation Authority, the travel regulator, could take action, since licensed tour operators are required to be financially stable.