Morrisons is thought to be speeding up its search for a new chief executive but it is refusing to confirm reports that it has engaged a specialist team of headhunters.

In October, as the retailer announced the first loss in its 106 year history, it emerged that long-standing chief executive Bob Stott planned to bring forward his retirement and step down next year, and not in 2007 as originally planned.

Morrisons has refused to speculate about reports that the 12-strong board has considered hiring a top-level recruitment company to find a suitable replacement.

It is understood that the company would like to unveil its new CEO to coincide with its annual results next March.

It is thought to be considering both internal candidates and strong outside contenders.

Georgina Mitchell, of stockbrokers Redmayne-Bentley, which supplies shares information to the Telegraph & Argus, said: "One of the key points will be finding somebody who can both get on with Sir Ken and also stand up to him because he's such a strong character.

"They don't need any more boardroom problems and they need someone who can take them forward with Sir Ken."

She said it was possible that internal candidates like managing director Marie Melnyk could be considered. She added that any outsider would have had to have had retail experience.

"Morrisons has a big job on its hands," she added. "It's not a basket case . With the right person at the helm it has a good chance of turning things round."

Chris Sharp, of Leeds-based recruitment company the Sharp Consultancy, said he suspected that if the company was going to choose an internal candidate it would have done so already.

"I suspect Sir Ken would like someone he knows," said Mr Sharp. "But with Sir Ken no one stands the chance of being their own man. Sir Ken doesn't change his mind.

"My view is that it's a poison chalice. Sir Ken has to satisfy himself and the shareholders but then he is the main shareholder, too."

A spokesman for Morrisons declined to discuss details of the search.

"We're not talking about the processes the company is going through to find a chief executive," he said.