Sir Anthony O'Reilly is set to take a large dilution of his shareholding in Waterford Wedgwood, in a bid to save the tableware company from collapse under the terms of a refinancing deal being discussed with US investors.

The Irish company's lack of cash forced it to announce on Monday that it had deferred payment of a €8m (£6.8m) coupon due to bondholders. Separately the company, which has debts of €400m, said its bankers have agreed not to invoke the cross default mechanism triggered by the nonpayment.