The future of Allders has been secured for the next two years after talks between store bosses and the company which controls the lease for its building.

Earlier this month the Croydon Guardian exclusively revealed how managers at Allders, the third largest department store in the country, feared they were running out of time to secure a new deal.

They were concerned that a delay in negotiations could have forced the store to close its doors for good.

But after discussions with Minerva, Allders managers revealed they would be able to continue trading from their existing North End store until 2008.

Andrew MacKenzie, chief executive of Allders, said: "Our discussions with Minerva have provided us with clarity and will enable us to continue to trade from our existing site in Croydon for nearly two years, including the next two Christmas periods.

"Over the next two years we will pursue alternative sites as well as continuing our discussions with Minerva in order to secure a long-term opportunity for Allders of Croydon."

Minerva is also spearheading plans for the new £500million Park Place shopping centre. Allders' North End site is seen as the prime retail site for the new development and rival John Lewis is expected to move on to the location. Allders is yet to secure a spot in Park Place.

Minerva recently became embroiled in the cash-for-peerages row which engulfed the Government.

It was suggested the company was granted planning permission for the development after lending the party millions of pounds.

Last week Andrew Rosenfeld, Minerva's non-executive chairman, announced he was to stand down.

The loans scandal accusation was strongly refuted by the company and the Labour Party and this week Steve Yewman, retail development director at Minerva, said: "We are pleased to have reached an understanding with Allders which enables them to continue trading from the existing site in Croydon until the end of January 2008, while guaranteeing that the programme for the Park Place development remains on track.

"Park Place will play a crucial part in Croydon town centre's regeneration programme by helping to re-establish Croydon as a significant retail destination within the UK and increasing the town's appeal and vitality."