The club was bought by the Glazer family in 2005 for £790m (€892m) but the deal was criticised by fans at the time for saddling the club with heavy borrowings.

The Glazers have asked two investment banks – JP Morgan and Deutsche Bank – to look at ways of reducing borrowings, the newspaper reports.

The bond issue being weighed up by the club would help it pay back some of its existing debt to banks, hedge funds and other financial institutions – estimated at about £700m (€790m).

Annual interest on this debt stood at £69m (€78m) in 2008, covered by operating profits of £72m (€81m).

But the main concern for the club is the £175m (€197.5m) in loans from two hedge funds – which the Glazers are personally responsible for – which are racking up interest charges of 14.25% a year, the report says.

The two hedge funds – Perry Capital and Citadel – have the right to appoint directors to the United board if the club’s financial performance sinks below a certain level.

Sources said the club’s senior lenders would be likely to resist attempts to prioritise repayment of the hedge funds, so any funds raised may be used to pay off the bank debt.

The club is looking to raise between £500m (€564m) and £600m (€677m) from the bond issue but could even look to raise more than £600m (€677m) if there is sufficient appetite among investors, the newspaper said.

Manchester United, JP Morgan and Deutsche Bank were unavailable for comment. A spokesman for the Glazers declined to comment.