Scottish and Newcastle has confirmed that it is considering plans to sell 1,000 of its 1,500 pubs.

The company said: "We've had a number of discussions with advisers and investment bankers in detail on the best way forward for the divestment of our pub assets."

"We've looked hard at the questions raised by the investment community and how we can maximise shareholder value and we are certainly not ruling out a sale of our pubs in a measured way."

Analysts have raised concerns that the disposal of some 1,000 S&N pubs could lead to a dilution of earnings and have questioned how the company re-invests the cash from any sale.

The company is thought to be considering selling off the sites in three separate tranches with the Royal Bank of Scotland.

The group is rumoured to have earmarked 500 pubs as part of the first stage of the divestment process which could raise between £500m and £800m for the company. Speculation suggests that is part of the deal will be completed by early next year.

The other two tranches would follow shortly after with the whole programme raising around £1.2bn.

S&N will retain management contracts, as it has done in four previous transactions with the bank.