Banks are reportedly working on debt financing packages of around £5 billion to back a potential sale of Bradford-based supermarket chain Morrisons to private equity funds in a move backed by some of the founding family.

According to a news agency report, cash-rich private equity firms are keen to do new buyouts after low levels of merger and acquisition activity in 2013, but the large scale of a Morrisons deal could mean several firms would need to work together, banking sources say.

Continued speculation about a possible deal saw Morrisons shares soar by 11.4p to 244p.

According to one banking source, talks have been going on for more than a month to see whether taking Morrisons private would be possible, although Morrisons' shareholders and retail analysts are doubtful that it will happen.

Sir Ken Morrison, the supermarket group’s retired chief executive and now life president, was reportedly surprised by news of the potential move.

The company is refusing to comment.

Morrisons, which is the UK's fourth-largest supermarket operator, was founded in 1899 and listed on the London Stock Exchange in 1967.