The company said it had been approached by several institutions with proposals for tackling its borrowings, although it refused to give further details.

The announcement came a day after it was reported the company was in detailed talks with CCMP Capital, the former the private equity arm of JP Morgan, about it making a capital injection worth several hundred million pounds.

Premier's share price has fallen sharply amid concerns about the level of debt on its balance sheet after recent mergers with RHM and the UK arm of Campbell's Soup, which makes Oxo and Homepride.

The impact of higher commodity prices on its working capital and lower proceeds from property sales has also affected the company's debt position. However, the group said in July that it met its financial covenant tests at the end of June and that it expected to continue to operate within them.

Premier's board is said to believe that a reduction in its debt burden would allow the City to re-rate it shares at a time when defensive stocks such as food companies are likely to find more favour among nervous investors.

Premier shares rose by as much as 13 per cent yesterday as investors welcomed the potential move, though they fell back in later trading.

The company said: "Premier Foods confirms that it continues to examine ways of accelerating the reduction of group debt.

"In recent months, the group has been approached by several parties with proposals in line with this stated priority."

It added: "The group is examining these proposals amongst other options and a further statement will be made as and when appropriate."

The speculation around the company has centred on a possible deal with CCMP but that could yet be abandoned in favour of another option, such as asset sales or an investment from another party.

Lion Capital, a former owner of Premier, Kohlberg Kravis Roberts and Permira are among the other private equity options.

Other brands in the Premier estate include Mr Kipling, Sharwood's, Quorn and Batchelors.

Analysts welcomed the company's move to deal with its debt.

Citigroup, which rates the stock a "buy" with a 130p price target, said it believed the market had been valuing Premier on "the weakness of its balance sheet and little else"

Investec analyst Martin Deboo also reiterated his 'buy' recommendation and 140 pence price target.

"We see the leverage discount as the major overhang on Premier's equity valuation and welcome any moves to restructure the balance sheet," he said.

Premier's shares closed yesterday at 61p, up 3.75p or 6.6 per cent.