THE troubled cafe chain Patisserie Valerie, which has a city centre outlet, has been rescued from collapse.

Chairman Luke Johnson pledged up to £20 million in new loans on Friday to rescue the company and saved around 2,800 jobs at 206 stores, including the ones at the Broad Street branch.

The company's future was thrown into question earlier this week after it uncovered fraudulent activity around its financial accounts and was served a wind-up order by the taxman over £1.14 million owed to HM Revenue and Customs.

Mr Johnson described the discovery as a "bombshell" and said he had "no inkling this was going to happen".

The group's finance director Chris Marsh, who was suspended from his role earlier this week, has since been arrested on suspicion of fraud, but was later released.

The serious fraud office has opened a criminal investigation.