Sir Philip Green's biggest backer backs out.

Sir Philip Green's biggest investor has sold its 25% stake in Topshop and Topman back to Arcadia - the company that owns and operates Sir Philip's wider retail empire.

US based Leonard Green & Partners bought its stake in Arcadia's two top retail brands in 2012 for a reported £350m. The investment group was seen as strategically important to help Topshop and Topman break into the US retail market.

Arcadia (which also owns Dorothy Perkins, Evans and Miss Selfridge) said the sale and the removal from the Arcadia board of two Leonard Green representatives would allow it to focus on its restructuring plans without having to rope in external directors at every turn.

That restructuring is thought to involve a form of insolvency proceedings called a Company Voluntary Arrangement (CVA), allowing it to exit or reduce rental agreements with retail landlords. Many other retailers - including the Arcadia owned BHS - used a similar mechanism when it was fighting, unsuccessfully, for survival.

Toe-to-toe

Arcadia is also in ongoing discussions with the Pensions Regulator to negotiate a reduction in cash contributions to its pension scheme which is over £500m in deficit.

In return for reducing the £50m it pays in each year to make up that shortfall, the company is offering to put company assets into the scheme.

Valuing a retailer in the current climate is extraordinarily difficult.

Leonard Green partners sold its 25% stake for an undisclosed sum. The BBC understands that what's left of Arcadia's property portfolio (many properties were sold and leased back) is seen as the most tangible asset the company has to offer.

Once again, Sir Philip finds himself toe-to-toe with the pensions watchdog.

Last time, he ended up writing a personal cheque for £363m to spare 20,000 of his current and former employees falling into the pensions lifeboat scheme - the Pension Protection Fund - which would have seen many losing up to 10% of their retirement benefits.

Once again, the Pensions Regulator finds itself in the unenviable position of having to play off competing interests. Keeping the sponsor of the pension scheme (Arcadia) on a sustainable business footing while ensuring pension scheme members are protected.

The news that a High Street retailer is struggling to cope with a changing landscape is hardly a new headline. But Sir Philip's ownership means that this case commands particular attention.

Sir Frank Field, the chairman of the Work and Pensions Select Committee repeatedly called for Sir Philip to be stripped of his knighthood in the aftermath of the collapse of BHS.

'Supportive'

Today he told the BBC that Sir Philip could show leadership, create goodwill, put pension scheme members' minds at rest and give himself the breathing room he needed to focus on Arcadia's restructuring, by paying to transfer the pension obligations to a commercial third party.

It's thought this so called "buy out" pension solution would cost in the region of £750m.

An Arcadia spokesperson said Leonard Green Partners remained "supportive" of the company and retained the option to repurchase its stake in the company.

Arcadia's restructuring plans are expected to be announced in early May.