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America´s largest airline is plotting to take control of Virgin Atlantic after making a secret approach to the British carrier's big Asian shareholder. Delta Air Lines is understood to have offered to buy Singapore Airlines' 49 per cent holding in Virgin. If it succeeds, Delta's European partner, Air France-KLM, may then buy part of Sir Richard Branson's 51 per cent stake, which would see him relinquish control of the airline for the first time. Air France-KLM's involvement is dictated by aviation rules, which say European airlines must be controlled by European nationals. Branson may retain a stake, and would, together with the Franco-Dutch group, hold more than 50 per cent. However, the sources cautioned that the talks were at an early stage, and it was not certain a deal would be reached. Singapore paid 600m pounds for its stake in 1999, The Sunday Times reports. Tesco will warn this week that sales in the UK have slipped into decline again, provoking new question marks about chief executive Philip Clarke's £1bn turnaround plan and the strength of the UK economy. In the first half of the year, Tesco reported its first fall in profits since 1994 as the decline in UK sales was coupled with pressure on the retailer's international businesses. In the third-quarter results on Wednesday, Deutsche Bank is forecasting that Tesco will say like-for-like sales in Asia fell 1.9% as it battles legislation in South Korea that is forcing supermarkets to close at the weekend. In the US, Tesco's Fresh & Easy business is set to report a 4% growth in like-for-like sales, but this will be a slowdown on the 6.9% in the second quarter and spark new doubts about the future of the division, The Sunday Telegraph says. Royal Bank of Scotland is expected to shrink its investment bank even further after refusing to cave in to pressure to sell its American business. Sir Mervyn King, the governor of the Bank of England, launched another blistering attack on banks last week, accusing the sector of hiding up to £60bn of bad debts. He is demanding that all banks raise more capital reserves. City regulators have been pressing RBS to consider a sale of Citizens, its American retail banking business, which could be worth up to £10bn. RBS, however, has said it cannot find a buyer quickly enough to meet the timetable of the new capital demands. As an alternative, the bank is believed to be examining ways to trim capital-intensive areas of its investment bank, writes The Sunday Times. Centrica is weighing a return of up to £500m cash to its shareholders early next year, The Sunday Telegraph has learnt. The plan, most likely to take the form of a share buyback, is understood to be one of a number of options that could follow withdrawal from a project to build new nuclear plants in the UK. The British Gas owner will announce its full-year results at the end of February, which would be the most likely point for it to review its shareholder returns. By then, it is due to have taken a decision on whether to utilise its 20% option in the EDF-led consortium to build reactors at Hinkley Point in Somerset. Centrica is widely expected to withdraw amid concerns over spiraling costs, with the plant estimated to cost £14bn, and doubts about the attractiveness of returns on the investment. While it has a portfolio of investment options, including further expansion in US markets, investment in UK power generation appears uncertain, The Sunday Telegraph says. George Osborne has admitted that tackling Britain's debt mountain will take longer than hoped, but warned that changing course would be a "complete disaster". The Chancellor's admission, combined with lower growth forecasts expected from the Government's official forecaster next week, means Mr Osborne could be forced to borrow up to £81bn more in the years ahead, and raises the prospect of a further fiscal squeeze. Speaking on the Andrew Marr Show, Mr Osborne said: "It's clearly taking longer to deal with Britain's debt, it's clearly taking longer to recover from the financial crisis than anyone would have hoped, but we've made real progress [...] to go back to the borrowing and the debt and the spending [that Shadow Chancellor] Ed Balls represents would be a complete disaster," according to The Sunday Telegraph. David Ross, the colourful multimillionaire founder of Carphone Warehouse, is at the centre of a row over his 141-year-old family business, the marine supply company Cosalt. Minority shareholders, acting together through various online investor chatrooms, have accused him of attempting to take over the London listed business on the cheap. They have written, as individuals, to the Takeover Panel and the Financial Services Authority, accusing Mr Ross of "abusing his position with a view to personally taking the company private at a ridiculously low price". Mr Ross responded this weekend. He said: "I have spent a year of my life trying to sort out a situation which I always said I would make no money out of," The Independent on Sunday says. A leading buy-to-let mortgage lender that flirted with disaster during the credit crunch is close to becoming Britain's newest bank. Paragon Group is understood to be in exclusive talks to buy Hampshire Trust, a tiny private bank that specialises in lending to solicitors and property developers. If the acquisition goes ahead, Paragon will gain a banking licence for the first time. That would allow the FTSE 250 company to start offering savings accounts to its customers. In 2007 the business came under attack from hedge funds which sold its shares over fears that it could collapse like Northern Rock. Paragon had been at the heart of Britain's buy-to-let boom ? it loaned about one in 10 mortgages that were issued to landlords, The Sunday Times explains. The Bank of England is poised to deliver the first verdict on its flagship scheme to boost lending in the economy tomorrow, amid growing fears of an early flop. Threadneedle Street launched the Funding for Lending Scheme (FLS), which allows financial institutions to access cheap funds in return for maintaining or increasing lending, in August. Some 30 lenders, including all the UK's biggest banks and mutuals except HSBC, signed up. The Bank, which took stock of the banks' lending levels at the end of June, will publish figures on how much participants have increased credit in first three months of the FLS. Despite initial hopes that the scheme would help the financial system to grow net lending by as much as £80bn or 5%, analysts are more pessimistic. Jens Larsen, the chief European economist at RBC Capital Markets, said: "Given that we are just two or three months into the scheme, it is likely to be something more in the order of £10bn," according to The Independent on Sunday. Amazon will tomorrow mark the busiest day of the year for internet retailers with the launch of a new business aimed at the luxury goods market. The strategy will see it go head to head with rivals such as Selfridges and Net-a-Porter with its Premium Store. It will begin selling womenswear brands, including 7 For All Mankind, Pringle, Hudson and Black Orchid.The launch is the culmination of two years' planning and is likely to include menswear ranges at a later date. The store will be found via the Amazon site but developers say it is expected to have a more 'glossy magazine' feel, The Financial Mail on Sunday reports.The luxury handbag brand Mulberry has scrapped plans for new outlet shops to focus on opening full-price only stores as it moves even further upmarket. The Somerset-based group will also develop its clothing line, worn by the Duchess of Cambridge this week, and produce new fashion products to expand its market reach. The brand, which issued a profit warning in October - its second this year - that sent its shares tumbling by more than a fifth, will step up its global store expansion. It is eyeing up new stores in France and Germany and across the US, as well as new Asian stores, The Independent on Sunday says.AB