The Central Bank has given the financially-troubled stockbroking firm MMI a further two weeks to get its financial affairs in order, either by reclaiming the £1 million to £2 million owed to it by clients or by finding an investor who will inject capital or a combination of the two.

Until then, MMI cannot carry out any stockbroking business without the explicit approval of the bank.

It is understood that the bank agreed to the two-week extension on the basis that there is now a reasonable likelihood that MMI will be able to find an investor who will provide sufficient equity funding to get the broking company out of its cash-flow crisis.

Sources close to MMI have indicated that negotiations with a British institution are at an advanced stage and recently-appointed managing director Mr Tim Murphy was in London yesterday trying to finalise a deal.

It is understood that the Central Bank is aware of the identity of the potential investor and the terms of the investment and is content that the prospects of a deal are sufficient to warrant the extra two-week period of grace.

"If the bank thought there was no hope for MMI, they would have pulled the plug yesterday and not prolonged the agony," said one source.

While a spokesman for MMI was unable to provide any details of the proposed rescue package, it is thought that the investor will take a substantial majority stake in the company - a move that will probably see the withdrawal of founder-directors Oisin Fanning, John Curran and Paul Boucher from the management of the stockbroking business. It is thought that an investor who takes control of MMI Stockbrokers is likely to also acquire the MMI asset management subsidiary.

It is also understood that solicitor's letters have now been sent to all 100-plus MMI clients who have still to pay their debts to MMI. However, it is generally accepted that reclaiming these debts of up to £2 million may be a long process and is a secondary consideration to finding the investor who will provide enough capital to get MMI over its immediate crisis.

The spokesman for MMI was unable to say whether these demands were taken on MMI's own initiative or at the behest of the Central Bank. The bank itself confined itself to a three-line statement confirming the two-week extension.

If an agreement with a new investor involves a withdrawal by Messrs Fanning, Curran and Boucher, then it is expected that the three founder-directors will concentrate on the MMI money broking business which was the springboard for their expansion into stockbroking and asset management.

There has been consistent speculation that many of the clients who owe MMI Stockbrokers money, from the rollover of payments for Dana shares, are dealers and traders on the Dublin money and foreign exchange markets who were clients of Money Markets International (the money broking business).

If this is the case, then there is a fear that many of MMI's client relationships in the money broking subsidiary may be jeopardised if those clients are forced to settle their debts with MMI Stockbrokers.

These debts may average £20,000 each, although some will be much larger and others smaller.