Tim Waterstone today abandoned his £280m bid to buy the bookstore he founded back from the books and music retailer HMV.

"We'd been negotiating all weekend ... our offer was made," Mr Waterstone told AFX News. "They [HMV] wouldn't allow us proper due diligence procedures, and without those proper due diligence procedures we could not continue."

HMV said it had been notified that Lazard Private Equity Partners had withdrawn its support for Mr Waterstone, who founded Waterstone's in 1982.

Last month, the entrepreneur said he was seeking to buy back the bookstore that bears his name for 70p a share. At the time, he said his proposal was conditional on HMV not going ahead with plans to buy the rival chain Ottakar's.

HMV, which is feeling the heat from online retailers and supermarkets, had agreed to buy Ottakar's for £96.4m. The offer lapsed after it was referred to competition watchdogs.

In March, the Competition Commission provisionally gave the green light for a takeover of Ottakar's by HMV, and it is expected that the bid will be revived.

HMV's bid for the book chain sparked criticism from the publishing industry amid fears it would limit choice for consumers. Analysts also questioned whether a deal would improve HMV's chances of competing with its rivals.

In March, the private equity firm Permira abandoned a £842m bid for HMV after the chain turned down the approach. Permira had previously offered £672m for the books and music store.