Doncaster-based UK Coal, which closed its Ellington colliery in January costing 370 jobs, received a preliminary and tentative approach from an unnamed suitor two months ago.

"Sufficient clarification has not been received and discussions have accordingly been terminated," the company said.

"We've been in an offer period for some time. It's not the easiest thing to manoeuvre around and there just wasn't continued justification to work under those constraints,” said chief executive Gerry Spindler.

"The board couldn't confirm the suitor had done sufficient homework, had familiarity or had the interest to go through with what would obviously be a very time-consuming process."

In March, UK Coal reported losses of £51.6 million for its last financial year. Given UK Coal has extensive property and land interests estimated to be worth between £174-200 million, some analysts suggested the bidder might have been a property concern.

When UK Coal was privatised in 1994, the terms allowed the British Government to take up to half of any profits.