A swathe of Britain’s high street will be owned by a failed Icelandic bank under a plan being drawn up by Kaupthing to seize Mosaic Fashions.

Kaupthing, which is run by a committee appointed by the Icelandic government, is planning to take owner- ship of Mosaic – a stable of brands that includes Karen Millen, Warehouse, Principles and Oasis – and provide it with funds to survive, according to two people familiar with the situation.