Food manufacturer Canterbury Foods has gone into administration after failing to agree new terms with its main backer, Barclays Bank.

The group, which had more than 400 customers in the UK, made about 1,000 products for in-store restaurants, food wholesalers, sandwich manufacturers and national pub groups.

Former chief executive Paul Ainsworth has subsequently headed a £7m management buyout of the group's most profitable businesses - pastry and food ingredients - under the new Medway Foods name.

The deal safeguards 200 jobs.

In September 2005 Ainsworth blamed Jamie Oliver's healthy school food campaign for contributing to the company's problems, as parents rejected burgers and sausages in favour of healthy alternatives.

In the six months ended 30 June 2005, Canterbury Foods made a loss before tax of £11.5m, which increased net debt to £19.5m.

Last month the company disposed of its meat products business to Transfield Foods for £4m, reducing company debt to about £15m.

Administrators PricewaterhouseCoopers said it would now look to find a buyer for Canterbury's cooked-meat products business.

By Chris Druce

Get your copy of Caterer and Hotelkeeper every week - click here to subscribe and save 25%.