Groupama told its staff just before Christmas that the sale of the company would be delayed until at least the end of the first quarter of 2002.

But the company confirmed it had "entered into an exclusive deal with another party" to take over the runoff side of the business.

A spokesman said: "While we are pleased with the progress of the sale, it is taking longer than expected.

"The process has been complex because we decided to restructure the business."

He said there were still a small number of serious bidders and that there was still hope the company could be sold as a going concern.

Groupama's UK arm had gross written premiums of about £600m in 2001, with profits of £25m.