Under the arranged deal Graham White and three other directors would have pocketed �20m between them after Londis merged with Irish firm Musgrave.

The proposed merger fell through following opposition from shareholders who would only have got �10,000 each.

Accountancy firm KPMG has been brought in to handle a sale of Londis.

Mr White and the three other directors - Andrew Wallace, Terry Bedford and Denise Buller - will still receive a total of �2m in compensation for dropping their rights to the �20m, the Times said.

Mr Wallace has joined Mr White in standing down from the Londis board; while Peter McNamara, the recently appointed vice chairman will temporarily head the company.

Potential buyers for Londis are reported to include Iceland owner Big Food Group and food retailer Co-op.