Hong Kong trading company, Li & Fung, has withdrawn from talks to buy Coats Viyella's clothing manufacturing business, according to The Times newspaper.

And no details are being released on who the latest contenders to acquire a number of Coats Viyella factories are.

Li & Fung had been rumoured to be interested in buying a number of Coats Viyella's factories, including its Marks & Spencer contract operation.

A spokesman for Coats Viyella declined to comment on the report in today's Times that the Hong Kong company had pulled out of talks.

The spokesman however did say: "We are in discussions with several parties and enjoy a choice of deals to go with. We are approaching a decision."

Coats Viyella announced in September that it was pulling out of the contract clothing, home furnishings and branded clothing businesses. It intends to concentrate on its global threads business instead.

By Deborah Bowyer