Ailing retailer Toys 'R' Us is facing potential collapse and the loss of 3,200 jobs, according to national reports.

The company is reportedly struggling to win the support of the state-backed Pension Protection Fund (PPF) for a planned restructure.

Toys 'R' Us recently announced a national shake up which would see 26 branches closing across the country, with the one on Chester's Greyhound Park to remain open.

But the retail giant is said to be struggling to meet the demands of the PPF who are demanding £9million to be pumped into their pension fund.

This would get the PPF’s support for the retailer’s plans for a Company Voluntary Arrangement (CVA), an insolvency procedure that would enable Toys 'R' Us to slash its outgoings and be able to keep trading.

But if this doesn't happen, the company could fall into administration – with the potential closure of all 84 permanent stores and around 20 more pop ups, which employ around 3,200 staff.

Malcolm Weir, the PPF’s director of restructuring and insolvency, said: “We are seeking to fully understand the current position of the company.

“That includes its future potential, the position of the US parent and the reported historic financial transactions.

"The pension scheme is already underfunded and, if we were to vote in favour of the CVA, we would need actions taken that ensure the position of the pension scheme was not going to further weaken.

"Whatever the outcome of the CVA, the pension scheme members can be reassured that they remain protected."

All Toys 'R' Us shops will remain trading through Christmas, but if the CVA is approved, those stores affected will begin closing from the spring.

Chester's branch of Toys 'R' Us first opened on the Greyhound Retail Park in the summer of 1993.