Former WH Smith chain TG Jones is set to axe up to 150 stores after a judge approved a restructuring plan that its private equity owners believe will save it from collapse.

The High Court has given Modella Capital, which bought the WH Smith's historic high-street arm last year for £40million and rebranded it, the green light for some of its shops to pay reduced rates of rent to landlords.

But TG Jones' lawyer said in court that the 'working assumption' is that around 150 of its 480 stores will shut. 

Store closures would happen in the event landlords who do not want to accept a reduced rate decide to terminate the brand's lease.

Under the proposals, 122 shops will not have to pay any rent for three years, which landlords are likely to struggle to accept. 

Lawyers said the business was 'highly distressed' after a 'long-term sales decline,' which had been made worse by high costs of employment and more shoppers turning to online retailers.

Modella Capital will inject a £15million loan, on top of £10million loaned in April.

There had been fears that the business faced being put into administration if the plan had not been enacted by 31 July.

TG Jones did not say how many staff could be made redundant, as this would depend on which stores can keep operating with long-term rent holidays. It currently employs around 4,700 staff.

TG Jones' chief executive, Alex Wilson, said the approval 'means we can now move ahead with our turnaround.'

He added: 'We will now be fully focused on investing in our stores, offering customers better value and service and supporting colleagues through the change ahead.

There is a lot of work to do and some of the decisions we need to make won't be easy. But today's outcome means we can now focus on delivering the plan.'

Founded just four years ago, Modella Capital has gained a reputation for buying distressed British retailers and shutting shops, including at Claire's Accessories and The Original Factory Shop.

The private equity group is also planning up to 100 job losses at footwear retailer Wynsors.

In recent weeks, Modella Capital has bought Danish retailer Flying Tiger, saying that it wants to open up more shops.