Chief executive Mike Milton said: "I regret that despite a last-ditch effort to sell the business over the weekend, the deal fell through. The directors have invited the bank to appoint an administrator, which will happen either today or tomorrow."

The news is a major blow to the Chessington-based printer's 120 staff, who had done their utmost to help the company through the downturn by voting in favour of a voluntary 33.3% pay reduction for May, June and July.

Geoff Carton-Kelly, of Baker Tilly, has been advising the directors of MPGi and has been recommended to the company's bank, Lloyds TSB, which is expected to make the final decision on who to appoint as administrator, either today or tomorrow.

Milton revealed that the company had "simply run out of cash" as a result of major customers withholding payment, invoice discounters reducing credit limits on certain customers, and through the directors' "own mistakes" in taking on work at market values that proved uneconomical.

"The printing industry has to wake up and draw a line in the sand on prices, otherwise there will be more casualties," he added.

"I know MPGi had joined the price reduction stampede over the past few months out of necessity, but in the long run it is just suicide."

Meanwhile, records at Companies House reveal that MPGi managing director Mark Croucher and company secretary Thomas Martin resigned on 18 May 2009.

In its most recent accounts, for the year ended 31 December 2007, MPGi recorded a pre-tax loss of £2.8m on a turnover of £11.6m, which was a slight improvement on the previous year when it made a £3.2m loss on its £11.2m turnover.

MPG Books Group, which was bought in an MBO in 2007 is a separate company with no ties to MPGi and unaffected by the move.