Major suppliers are preparing to pause deliveries with Poundland amid fears it could collapse, putting 12,000 jobs and 600 stores at risk.
Reports on Sky News say the struggling discounter may file a notice to appoint administrators today.
Several key suppliers have already taken steps to stop shipments to stores because they doubt timely payment.
Industry sources told the outlet that Gordon Brothers has restricted access to the company's finances, which could hinder routine payments.
The discounter is said to be close to implosion after three board members are set to resign.
Sources said the dispute centres on the group not accepting a "solvent offer from Martin Property Group".
They added this could make Poundland "increasingly likely to be broken up after being placed into insolvency proceedings."
Poundland is currently owned by American investment group Gordon Brothers, which bought the chain for £1 last year.
Barry Williams, chief executive, sent a letter to the chain's 12,000 employees yesterday, calling the issue "unexpected, unwanted and wholly avoidable".
He wrote, "I'm disappointed to have to tell you that Gordon Brothers have restricted access to funds that we would in normal circumstances expect to access fully under our existing loan agreement."
If the company collapses, it would become one of the biggest recent high-street casualties, endangering over 12,000 jobs and 600 stores.
The Sun has approached Gordon Brothers for comment.
