England may lose its shirts to Germany

GERMANY, England's arch enemies on the football pitch, could soon be making the team's "three lions" strip.

Adidas and Puma, the German sportswear giants, have emerged as favourites to produce England's kit after Umbro, the US-owned group which currently clothes the England team, ran into financial difficulties.

Umbro had won a new pounds 50m contract to supply the team's kit for the next four years. However the Football Association is increasingly concerned about the group's financial position and is considering putting the contract up for auction again.

City bankers are sounding out rivals about potential bids for Umbro. The company's financial problems and a possible take-over could have big repercussions for English football. As well as supplying kit for Premiership teams such as Manchester United, Chelsea and Everton, the group also has Alan Shearer, the England skipper, and the Liverpool wonderboy Michael Owen in its stable.

Adidas and Puma are both keen to supply the England kit, and could look to take on the contract either as potential suitors for Umbro or by submitting a bid to the FA.

Nike, the US company which lost out to Umbro in the original bidding war for the England contract and which is desperate to increase its presence in the British market, is also interested.

Umbro's kit contract expires after this summer's World Cup finals in France. Its proposed deal with England would be the second-biggest in the history of the game. Only Brazil's pounds 250m, 10-year deal with Nike is worth more. The FA contract is with the British arm of Umbro, which was chosen to keep the contract in British hands. The FA may be forced to look overseas if it does not receive cast-iron financial guarantees from the group.

The doubt about Umbro's future raises a question mark over the a kit deal it recently signed with Manchester United, worth an estimated pounds 40m over six years.

Umbro is looking to raise substantial new capital through loans or issuing new equity in order to stem its cash crisis. However the refinancing of the group is likely to take months, a delay which the FA may not be willing to put up.

The FA's executive committee is understood to be meeting this week to discuss Umbro's problems.