Government ministers have been advised to reject the £320 million bid tabled by a racing consortium for the state-owned Tote bookmaker. According to a report in the Telegraph newspaper, financial firm PricewaterhouseCoopers, which is acting as an adviser on the deal, said that the consortium's valuation was too low and any move to sell at that price would risk being blocked by the European Union for contravening state aid rules.

Ministers at the DCMS are now believed to be considering their options, which would include continuing with the bid as it stands, asking the consortium to up the price of the bid or putting the betting firm up for auction on the open market.

The consortium, comprised of Tote management and staff, the Racecourse Association and the Racehorse Owners Association, would likely not increase its bid having already dropped the offering price from £400 million amid concerns of level of debt to fund the bid. The open market plan is starting to look more likely as Gala Coral has already expressed an interest in the Tote.