THE UK’s biggest care home operator confirmed yesterday that it was hoping to re-negotiate rental costs with its landlords.

Southern Cross, which leases the vast majority of its 750 care homes, has come under pressure from public spending cuts and wants to attract more self-funding residents.

The Darlington firm has enlisted its long-term financial advisor, investment bank Morgan Stanley, to assist with the talks with its landlords.

It follows a traumatic few weeks for Southern Cross, which last month issued a profit warning and rejected talks with a private equity firm interested in buying the business.

Public spending cuts have led to a reduction in admissions from local authorities, which account for about 80 per cent of its revenues.

Despite this, Southern Cross rejected an offer of talks from Towerbrook Capital two weeks ago.

Last night, the company said the decision to approach its landlords was not related to that offer.

A spokesman said: “The aim is to approach landlords to see if they can negotiate terms to reflect the climate.”