Online grocery service Ocado was forced to slash the price of its initial public offering by 20 per cent, just hours before the final deadline on Tuesday night for potential investors to put up their cash.

The new asking price is 180-200p, less than the indicative price range of 200-275p the company board announced at the start of its flotation process earlier this year.

The mid-price of the latest range will value Ocado at £760m, says The Independent.

The company's directors had earlier valued the business up to £1.1bn - a figure which came in for a torrent of criticism from City analysts.

Most analysts considered the business to have been overvalued, and believe it should be closer to £500m.

Ocado has never made a pre-tax profit in the ten years since it was founded by three Goldman Sachs bankers, and has used up £350m of cash raised from investors.

Its existing investors have raised about £154m by selling their shares.