The company behind Mr Kipling cakes, Paxo stuffing and Hovis bread last night denied it was poised for a £1bn flotation.

RHM, which employs more than 20,000 staff at 69 sites in the UK and Europe, was rumoured to be preparing for a public listing next year.

But the company, which employs 250 people to bake speciality breads at its British Bakeries site in Newcastle, said: "No decision has been taken on an IPO (initial public offering)."

Private equity group Doughty Hanson bought RHM, which is based in Marlow, Buckinghamshire, in 2000.

According to the Financial Times, the group has instructed Credit Suisse First Boston to prepare for a listing in the second half of next year.