THE future of an East Lancashire hotel is in the balance after the firm which owns it was placed into administration.

The London and Edinburgh Swallow Group, which runs the Swallow Hotel, Preston New Road, Samlesbury, has called in receivers for what it calls "heavy losses".

Now administrators Ernst & Young have announced the group is to continuing to trade while a buyer is sought for the business. In total across the country 671 sites are affected, with more than 7,000 jobs.

So far Ernst & Young have sold 240 hotels and pubs to another firm, safeguarding 2,500 employees, but the Swallow Hotel at Samlesbury is not included in the sale, administrators said.

Angela Swarbrick, one of Ernst & Young's joint administrators, said: "We are continuing to trade the various companies on a business as usual' basis while we explore the possibility of a sale of the businesses and their assets as going concerns."

In total, six firms are affected: The London and Edinburgh Swallow Group Limited, Swallow Hotels Limited, London and Edinburgh Inns Limited, Newlord Limited, React Inns Limited and The Gourmet Pub Company Limited.

According to Ernst & Young, the hotels and pub chain had struggled for some time in the face of increasing heavy losses, and the directors of the group decided the best course of action would be "restructuring through an insolvency process".

The site was formerly the Trafalgar hotel.