Top directors of department store Debenhams could make a paper profit of more than £100 million if the retailer pushes ahead with its controversial flotation, it was claimed yesterday.

In what looks set to be one of the most profitable private equity deals in British history, Debenhams' owners are set to make a £1.8 billion return less than two-and-a-half years after they bought the business, according to one report.

The private equity owners of Debenhams have been conducting a secret search to find a buyer before going for a float.

It is understood they plan to sell a 60 per cent stake, according to a research note circulated to fund managers by Citi-group, one of the banks leading the float.

Most of the proceeds from a sale will be used to pay Debenhams' debt leaving the retailer with £1.2 billion of borrowings.

The private equity firms will, however, bank proceeds of about £300 million from the float and will be left with a 40 per cent stake in the business alongside chief executive Rob Templeman, chairman John Lovering and finance director Chris Woodhouse, who are expected to retain a five per cent stake.

Citigroup expects the retailer to have a market value of between £1.7 billion and £2 billion.

Private equity owners -Texas Pacific, CVC Capital and Merrill Lynch Private Equity - will be barred from selling their remaining stake in the business for only six months, it was said. The management will be blocked from selling for six months.

If the float does proceed bankers believe that part-ners at CVC and Texas Pacific Group will be entitled to bonuses of up to £70 million each.

Debenhams' owners invested £600 million of equity in 2003 when they outbid Permira with a deal worth £1.9 billion, including debt.

It is believed that the trio has received capital repayments of about £1.3 billion from Debenhams since then.

The rewards were secured after Mr Temple-man made the company's operations more efficient, embarked on an aggressive store opening programme and used debt to improve investor returns.

Sales broke through the £2 billion barrier for the first time in the year to September 3 while pre-tax profits soared to £238.6 million compared with £107 million a year earlier.

Debenhams declined to comment on the report.