An internal inquiry by the Dutch retailer Ahold has found that the company inflated its profits by $880m (�550m).

That is nearly $400m more than was originally estimated when accounting problems were uncovered earlier this year.

The irregularities took place at the firm's US Foodservice subsidiary and involved two senior vice-presidents.

Ahold said in a statement that no evidence of fraud had been found at other operations.

That was enough to reassure investors and shares jumped by 11%.

When the problems were first disclosed in February, Ahold's shares lost two-thirds of their value in one day.

And the firm's chief executive and chief financial officer resigned.

Bank deadline

Oscar Poos, an analyst at Ooyens en Van Eeghen described the $880m overstatement as colossal.

But he said the announcement would remove uncertainty for shareholders.

Ahold said it was confident it could now finalise its 2002 results and republish them before the end of June.

The company has a 12bn euros debt pile and it needs to meet the June deadline in order for its banks to continue lending money.

Although Ahold has finished its own inquiry, the company is still being investigated by the US Securities and Exchange Commission and Dutch regulators.

Last week Ahold appointed a new chief executive - Anders Mobert, a former chief executive at Swedish furniture group Ikea.