MARKS & Spencer cut its prices by 20 per cent for a second time yesterday as the high street retailer stepped up its battle to attract Christmas shoppers.

The latest one-day promotion, covering more than half of its products, took place amid signs that customers were finding plenty of bargains on the high street.

On Wednesday, Woolworths cut its prices by ten per cent for the day, while a number of other companies have been operating sales.

Industry surveys have indicated a tough festive period for retailers, although both M&S and Woolworths denied they were taking panic measures.

M&S, which has about 370 outlets in the UK, said its first 20 per cent promotion last month was so successful that it had decided to repeat the exercise.

Woolworths, which makes 40 per cent of its profits in the run-up to Christmas, said its sale was part of a previously-planned strategy that also involved three-for-two offers last month.

For M&S, this Christmas season is particularly important, coming after new chief executive Stuart Rose's successful defence of a takeover approach from retail tycoon Philip Green.

A survey by the Confederation of British Industry earlier this week said most high street retailers were bracing themselves for a gloomy Christmas as consumers showed a reluctance to spend on expensive items because of higher borrowing and energy costs.

Also, competition has intensified, particularly in the supermarket sector, following the takeover of Safeway by Morrisons.