This will also include enabling companies to continue buying essential supplies, such as energy, raw materials or broadband, while attempting a rescue, and temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability.

Sources said UK laws could be brought in line with US chapter 11 bankruptcy rules, which enable firms time to pay off their debts over time while remaining in business.