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Supermarket chain Sainsbury's has been described by a leading shareholder as a "real estate company with a retail business on the side".

Property tycoon Robert Tchenguiz wants the group to use its 750 supermarkets to free up cash for stockholders.

His comments to the Daily Telegraph come as the £10.2 billion private equity takeover for the company collapsed.

The Sainsbury family, which owns almost a fifth of shares, was unwilling to discuss an offer of below 600p per share. It has also previously expressed a desire to hold onto its property portfolio.

Mr Tchenguiz, who this week upped his stake in Sainsbury's from 4.67 per cent to 5.07 per cent, told the Telegraph: "Sainsbury has £1.6 billion of debt and a capital value of £10 billion. In anybody's book this is a bad capital structure."

And referring to the collapsed takeover bid, he added: "The company has been under siege for two months. We might not have accepted the offer, but that's a different matter. It doesn't cost anything to see whether shareholders wanted it."

Earlier this week Lord Sainsbury insisted that the group's success had been based on a "strong balance sheet and a largely freehold property base".

He continued: "Eroding these attributes will make the company more vulnerable to competitive pressures which is not in the best long-term interests of the company, its customers, its staff, its shareholders or its pensioners."