AN embattled toy retailer is said to have tabled a fresh pensions proposal to save thousands of jobs.

Toys ‘R’ Us UK is understood to have made concessions over a pension deficit as bosses frantically work to prevent the business from collapsing.

The company, which earlier this month unveiled store closure plans, is believed to have put forward a new deal aimed at eliminating a shortfall, following pressure from the Pension Protection Fund (PPF).

It is understood the deal would shift its deficit recovery plan to ten years from 15 years, and offer a larger payment than the £1.6m planned in January and March.

However, around 3,200 jobs hang in the balance because the PPF has so far refused to back the retailer’s rescue plan unless it agrees to pay £9m upfront into its pension fund.

The PPF wants Toys ‘R’ Us to make the payment to secure three years’ worth of funding upfront for its defined salary staff pension scheme, which has a shortfall of between £25m and £30m.

But the business, which previously confirmed a store on Teesside Retail Park, near Stockton, and outlets in Gateshead and Sunderland had escaped the axe, is not believed to have enough cash to meet the PPF’s demands.

The retailer, which is owned by US-based Toys ‘R’ Us Inc, trades from 84 stores in the UK and has 21 concessions.

Upon announcing its turnaround plan, bosses said trading had suffered at its warehouse-style stores, which are now “too big and expensive to run”, with the firm also understood to have struggled against online competition.