The Co-operative Group which was founded in Rochdale is expected to post losses as high as £2.5 billion as it faces more pain from the biggest crisis in its history.
Former City minister Lord Myners, who has drawn up proposals for a major reform of the business, pinned the blame for the disastrous figures on former managers "who were allowed to run amok like kids in a sweet shop".
He said in an article in the Daily Mirror: "They bought up businesses willy-nilly - from Britannia Building Society to Somerfield supermarkets - and made catastrophically inept decisions over and over again. In the process they crippled the group with huge debt."
The Co-operative has given publishers of lads' magazines an ultimatum to cover them up in "modesty bags" or face having them removed from shelves across 4,000 stores.
Titles such as Front, Loaded, Nuts and Zoo - known for their pictures of scantily-clad models - have been given until September 9 to deliver the magazines in pre-sealed bags.
The retail group, which describes itself as one of the UK's largest magazine sellers, had already introduced opaque screens on shelves earlier this month to shield children from "lewd pictures" on front covers.