Financially unstable property services group Erinaceous has announced that it may sell its insurance arm.

It is believed that accountancy firm Deloitte is scouting for potential buyers for Erinaceous Insurance Services (EIS) as mounting debts threaten to derail the company.

The group is struggling under a mountain of debt, which has seen its share price nose-dive by around 90 per cent.

There are reports that Zurich, Allianz and Towergate could all be interested in a takeover for the ailing company.

In a statement, the board have said that it was looking at ways of reducing the group's "unsustainable debt".

It added: "Following a significant number of approaches from parties interested in acquiring EIS, the board has decided to review whether a sale of EIS at this time would be in the best interests of the group."

Official figures for 2006 shows insurance business accounted for over a third of the group's £41.2 million profits.

Shares in the group are currently struggling around the 3p mark.

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