The move would be part of a government supported ‘pre-pack administration deal’ that would see the company broken into two and split between the Coal Authority and the Pension Protection Fund.

PricewaterhouseCoopers is on standby to oversee the process, according to the Sunday Times, which revealed the plans.

Discussions concerning the future of the company have been underway since a February blaze forced the closure of its Daw Mill colliery, leaving the company with cash flow problems and the threat of liquidation or nationalization.

PPF sent an email on May 9 that proposed the deal to the chairman of the two main miners’ schemes, according to a report in The Times.

The newspaper said it had seen the email from PPF head of restructuring to Keith Jones outlining ‘Project Dexter’, a plan that would see PPF take over what remains of the British coal company.

The Times quotes Favier as writing: "We have been looking into the possibility of taking ‘ownership' of the mines to help mitigate the substantial burden our levy payers are going to have to bear if the Industry Wide Mineworkers' Pension scheme and the Industry Wide Coal Staff Superannuation schemes come into the PPF."

"I need a very quick response from you so we can either decide to proceed with the restructuring or not before events overtake us and a compulsory liquidation is the inevitable consequence,” Faveir reportedly warned Jones.

At the time, UK Coal director of communications Andrew Mackintosh described the leaking of the emails as "unhelpful” and said discussions were continuing.

The government, the company and relative trade bodies have been locked in discussions concerning the future of the miner for months. The problems for the company come just months after it underwent a major restructure, designed to ensure the future of the company and keep the scheme out of the PPF.

UK Coal has two staff pension funds with about 10,000 members who are expected to see reduced benefits in the deal designed primarily to safeguard jobs.