Poundland's founder, Steve Smith, has said he would invest in the discount chain. Smith, who set up the business in 1990, made the offer as Business Minister Kate Dearden prepares to meet senior Poundland executives later this week about the company's threatened insolvency, according to the BBC.

Smith said he had tried to contact the owners, US-based Gordon Brothers, over the past three months without reply. He said he was "really surprised" to learn they had filed for administration when sales were up 11% on last year. He said that "even last week" sales were 11.2% up on the previous year. "Although Poundland made a loss last year, they're going to make a good profit this year, so it's just crazy," he said.

Gordon Brothers bought Poundland from Polish retail group Pepco last year for £1. The firm has stopped funding the business and rejected a takeover offer from Irish firm Martin Property Group (MPG). Gordon Brothers said MPG had been identified as the preferred bidder by Poundland's management team, and that attention must now turn to other active bids. It said it was evaluating interest for the whole business and formal and indicative offers for significant viable parts of it.

The board of Poundland Limited said it had been "working on a formal sale process" but that, despite "enormous efforts," it had not been possible to identify an acceptable offer for the business as a whole.

Poundland has been given until Thursday to find a rescue deal, putting up to 12,000 staff at risk. Smith warned that the two or three thousand suppliers that work only for Poundland would also be directly affected. He estimated the total job losses could be 20,000 to 30,000.

It is understood the meeting with Dearden will be mainly a "fact finding" session. Government sources conceded there is limited scope for the government to intervene in a commercial transaction. No meeting is currently planned with Gordon Brothers.

Liam Byrne, chair of the Business, Innovation, Science and Trade Committee, said he believed the company could be saved. He said "the whole deal stinks to high heaven right now" and that the owner could be "trying to cut and run."

Prime Minister Andy Burnham has said the government was "ready to support" staff and called for answers over why an offer to buy the business had been rejected.