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Sir Philip Green's high street empire wants to halve the annual funding it provides to its retirement scheme in a move that risks plunging the billionaire former BHS owner into a fresh pensions row.

Sky News can exclusively reveal that Arcadia Group and its advisers have proposed that it reduces its yearly £50m contributions to approximately £25m as part of a financial restructuring that will entail the closure of dozens of stores.

The proposal, which was made in recent weeks during discussions between Arcadia's advisers, its pension trustees and The Pensions Regulator, is likely to prove controversial.

It comes just over two years after Sir Philip was forced to commit up to £363m to the retirement pots of thousands of former BHS workers following months of discussions which saw him become engulfed in the biggest reputational crisis of his career.

Arcadia's pension scheme, which has thousands of members, is understood to have a deficit of about £550m on a conventional funding basis, and £750m on a full buyout basis.

One source described the proposal to halve Arcadia's contributions as "the opening shot" in negotiations between pension stakeholders and the company, which owns brands from Dorothy Perkins to Miss Selfridge.

Under the plan, which is being orchestrated by Ian Grabiner, Arcadia's chief executive, scheme members also face seeing their benefits reduced through a planned switch from RPI to the lower CPI measure of calculating annual payment uplifts.

Sources said that would eliminate as much as "a couple of hundred million pounds" from the deficit calculation.

The switch from RPI to CPI has been widely used by companies in order to help reduce yawning pension deficits, underlining the huge challenge facing corporate Britain in meeting funding promises made to their workforces.

Arcadia, which employs about 18,000 people, is proposing the pension overhaul as part of a wider plan that will involve store closures and rent cuts being implemented through a company voluntary arrangement (CVA).

CVAs have been widely used by retailers such as Carpetright, Mothercare and New Look in the last two years as trading conditions on the high street have deteriorated.

While the proposal to reduce the company's contributions risks further undermining Sir Philip's reputation, a restructured business with lower overheads would have a better chance of surviving the current retail maelstrom.

It was unclear what impact a halving of the company's pension contributions would have on Arcadia's deficit recovery plan, but sources said trustees and regulator were likely to insist on a lump sum or security over a substantial chunk of the company's assets to satisfy them as part of any agreement involving a cut.

An insider said on Friday that Sir Philip's company might not break even this year amid an accelerating sales decline at Topshop, his flagship brand.

"With the company's current financial structure, it would be lucky to stay solvent for a couple of years," one retail source said.

Under its proposals, fewer than 50 of Arcadia's 500 standalone shops in the UK would close, while landlords have been notified that the company is seeking an average 30% rent cut across the rest of the estate in an effort to save tens of millions of pounds a year.

The Sunday Times reported last weekend that landlords would be offered an equity stake in Sir Philip's company - and potentially a cash sum - in return for endorsing the CVA.

Property industry sources described the talks as "constructive" and said that Arcadia was taking a "consensual approach that should be applauded".

Sir Philip is playing a peripheral role in the current talks and is said to be adopting an increasingly distant approach to the business which helped catapult his family into the ranks of Britain's wealthiest people.

The pension scheme proposals are likely to be seen as the biggest potential flashpoint in the restructuring of his company.

Regulators were strongly criticised for their dealings with Sir Philip before he sold BHS to Dominic Chappell, a former bankrupt, in 2015, and are expected to take a robust stance towards Arcadia's plans.

One source said that pension stakeholders were "broadly accepting" of the need for a reduction in Arcadia's funding commitment.

The requirement for such a cut is perceived to be important because it will illustrate to landlords that they are not the only creditors facing financial pain from the overhaul of one of Britain's most prominent retailers.

Advisers are said to be working towards a formal launch of the CVA by early May, although the timetable could yet slip.

Deloitte is advising Arcadia, while its pension trustees are being advised by EY.

Frank Field, the Labour MP who chairs the Commons Work and Pensions select committee and has fought a long-running battle with Sir Philip, said: "When things are going well, Sir Philip Green and his family take mega-dividends out of the company; when things are not going well, the workers have to pay.

"The select committee will look carefully at any changes to the Arcadia pension scheme."

The financial restructuring comes at a delicate time for Sir Philip, who has been embroiled in a storm over his behaviour towards Arcadia employees and his use of non-disclosure agreements to prevent former workers discussing their severance packages.

In January, he against The Daily Telegraph's publisher just before it went to trial, but has continued to deny all suggestions of "unlawful sexist and racist behaviour".

Some MPs continue to push for him to be stripped of the knighthood he was awarded in 2006 for services to the retail industry.

A spokesman for Arcadia declined to comment, while The Pensions Regulator could not be reached for comment.

Sir Philip's Taveta Investments vehicle bought Arcadia in 2002, enjoying a golden period as Topshop became one of the most desirable brands on the high street.

In 2012, he sold a 25% stake in Topshop to Leonard Green & Partners in a deal valuing the brand at £2bn.

Sources said that a CVA would encompass the entirety of the Arcadia Group, although some brands would be disproportionately affected.

Arcadia has already been closing stores for several years when leases have expired, but the growing crisis on the high street has prompted Sir Philip to explore more radical plans to deal with the pressures which have triggered bankruptcies at LK Bennett, House of Fraser and Toys R Us UK, and left Debenhams on the brink of insolvency.

When Sky News revealed last month that Sir Philip aimed to launch a CVA within weeks, Arcadia said: "Within an exceptionally challenging retail market and given the continued pressures that are specific to the UK high street we are exploring several options to enable the business to operate in a more efficient manner.

"None of the options being explored involve a significant number of redundancies or store closures.

"The business continues to operate as usual including all payments being made to suppliers as normal."