Directors of HMV are this evening locked in talks about the retailer's future amid growing concern that it could become the latest big-name high street chain to succumb to the flat-lining British economy.
I have learned that the board of HMV has been meeting today to thrash out options for the company, which are said to include a possible plan to call in administrators.
People close to the situation said that a number of options remained under consideration and that any announcement about a board decision was unlikely until later on Monday or Tuesday. It remains conceivable that HMV's lenders or another party will ride to its rescue and avert the need to appoint administrators.
If HMV did concede defeat in its attempt to trade itself back to health by calling in administrators, it would deal a devastating symbolic blow to the future of the British high street.
It would also put more than 4,000 jobs at risk, just days after the camera retailer Jessops announced its demise, with the closure of nearly 200 shops and the loss of almost 2,000 jobs.
HMV is run by Trevor Moore, who recently took over having held the chief executive's post at Jessops.
If administrators are called in, the retailer's board would probably hire either Deloitte or KPMG, two of the big four accounting firms, to oversee the process, according to people close to the situation.
Some of HMV's 230 UK stores could yet be saved from closure if the company manages to attract a bidder. However, analysts have said for some time that a viable HMV is likely to involve a significantly smaller number of shops trading on UK high streets.
Apollo Management, the US-based investment firm, has been acquiring some of HMV's debt from its lenders and was reported last month to be keen on a takeover of the company. Reports today suggested that it was no longer interested in buying HMV.
HMV has been the subject of periodic speculation that it would fall into administration for several years as it faced increasingly intense competition from supermarkets as well as online retailers such as Amazon.
Its shares, already close to having negligible value, were further hit just before Christmas when the company warned that it risked breaching its banking covenants at the end of January, blaming poor sales in the run-up to Christmas.
The company has not yet disclosed its trading performance during the crucial festive period although a decision last week to launch a huge sale across its product range reignited fears - denied by HMV - that it was running short of cash.
HMV insiders said the company has been considering updating the market next week on Christmas trading.
HMV has raised tens of millions of pounds by selling assets including the Hammersmith Apollo music venue and the Waterstone's bookseller in an effort to buy itself more time to execute a turnaround strategy devised by Simon Fox, Mr Moore's predecessor.
The music industry's biggest companies have also chipped in to help prolong HMV's future, participating in a new financing package last year.
The prospective administration of HMV is politically complicated by the fact that the company's two biggest lenders are Lloyds Banking Group and Royal Bank of Scotland, which both count the British taxpayer as their largest shareholder.
HMV traces its heritage back to 1921, when Sir Edward Elgar, the renowned composer and conductor, opened its first store on London's Oxford Street.
HMV declined to comment on Monday evening.