DIY chain calls for government investigation after credit insurers withdraw almost all cover for Focus’ suppliers.
Less than 5% of the stock Focus buys is now insured - a drop from about a third in September 2008.

The company, which was bought by private equity group Cerberus in 2007, said it has managed to persuade its suppliers to stick with the standard 67-day payment terms instead of demanding payment upfront.

Focus chief executive Bill Grimsey has met with a number of the DIY chain's suppliers in the last fortnight to discuss the issue with them.

In an interview with The Times, he said: "I'm not getting anyone not co-operating, it's just that it becomes hand-to-hand combat for a while. Those conversations are not helping us sell more products."

Mr Grimsey explained that he had written to business secretary Peter Mandelson and had also put together a letter from 20 Focus suppliers to all three political parties demanding an investigation into the business model followed by Atradius and many other credit insurers.

He said: "They are fair-weather friends who don't go into enough detail, make unilateral decisions with short notice, and jeopardise the future of businesses."

A spokesperson for Atradius said: "We have been in dialogue with Focus DIY for some time. Ultimately, our duty is to effectively manage the risks of our customers and we only withdraw cover as an absolute last resort."

The insurer is not alone in withdrawing cover for suppliers to high street retailers. Its actions have been mirrored by two other leading credit insurers, Coface and Euler Hermes.