Mike Ashley's Sports Direct has made a revised £200 million rescue offer for Debenhams, delaying the department store's prospective administration.

The billionaire had an offer to underwrite a £150 million rights issue rejected on Monday.

Lenders to Debenhams said the latest proposal, on the terms set out, including that Mr Ashley be made chief executive of the chain, was "not sufficient".

Debenhams said in a statement: "The board confirms that it received a revised, highly-conditional, proposal from Sports Direct in the early hours of April 9, which indicated a willingness of Sports Direct to underwrite an equity issue of £200 million.

"The company's lenders have confirmed to the company that the proposal, on the terms set out, was not sufficient to justify an extension to the April 8 deadline.

"The company anticipates making a further announcement during the course of the day following further discussions with its lenders."

Debenhams has requested that its shares be suspended from trading with immediate effect, pending a further update.

Consulting has been appointed to carry out the process but the firm insisted that stores will continue to trade as normal.

Administrators have sold the group to a newly-incorporated company controlled by Debenhams' lenders, including hedge funds thought to include Alcentra, Angelo Gordon and Silver Point Capital.

Under new ownership, Debenhams will have access to £200 million in emergency funding.

The move is expected to trigger store closures and job losses as part of a wider restructuring that will see around 50 outlets shut via a Company Voluntary Arrangement.

The widely-anticipated change of ownership means that shareholders such as Mike Ashley's Sports Direct, who holds a 30% stake, will see their investments wiped out.

Debenhams had on Tuesday rejected a separate rescue bid tabled by the billionaire tycoon.

Terry Duddy, Debenhams chairman, said: "It is disappointing to reach a conclusion that will result in no value for our equity holders.

"However, this transaction will allow Debenhams to continue trading as normal; access the funding we need; and proceed with executing our turnaround plans whilst deleveraging the group's balance sheet.

"We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.

"In the meantime, our customers, colleagues, pension holders, suppliers and landlords can be reassured that Debenhams will now be able to move forward on a stable footing. I would like to thank them all for their recent and continuing support."

A spokesman for the Debenhams Pension Schemes said: "Debenhams Retail Limited has been transferred to a newly-incorporated company and continues to trade and operate as normal. Members can therefore be reassured that the schemes are carrying on as usual.

"The trustees have worked with our specialist advisers throughout the process of the company's refinancing and restructuring, to ensure that members' interests are taken into account and we have consulted closely with The Pensions Regulator and the Pension Protection Fund at every stage.

"We are in the process of writing to all members with further information and we will continue to keep them informed."