HMV may be able to avoid closure of all of its stores after the news that major record labels and film studios are getting behind the company and planning a rescue deal.

Some of the biggest major record labels, Universal Music, Warner Music and Sony are reportedly planning to slash the prices of their CDs and DVDs and allow HMV generous credit terms so that they can attract more business.

The companies are allegedly extremely keen to keep the last major entertainment retailer on the high street alive to avoid their merchandise being sold at a fraction of the price in supermarkets or through internet shopping sites.

An industry insider said: “They don’t want their only choice to be Tesco or Amazon.”

If HMV were to close, it would be a massive blow to the British entertainment industry because although the retailer may be struggling, it still accounts for one fifth of the British music and DVD market.

There have apparently been close to fifty different companies showing “expressions of interest” at buying HMV including video games retailer Game, despite the fact that the company was also in trouble itself last year.

A theory as to what caused HMV’s downfall has been “the brand’s failure to successfully move into the online market”, according to industry experts.