The Serious Fraud Office (SFO) is poised to launch a formal criminal probe into the accounting crisis at Tesco that led the UK’s biggest retailer to overstate profits by £263m.

Sky News has reported that the agency could confirm as soon as this week that it is opening an inquiry, adding to separate investigations by the City regulator and the accounting watchdog.

The SFO is understood to have notified Tesco of its intention to formally investigate the issue in recent days, and is expected to trigger a stock exchange announcement by the supermarket giant.

The move is not entirely unexpected, but the news that the SFO is to undertake a formal probe will add to the sense of crisis at Tesco.

The company, which has lost more than half its value during the last year, has been hit by unprecedented boardroom turmoil, with the chairman, Sir Richard Broadbent, planning to quit next year.

Eight executives, including the UK managing director Chris Bush, have been asked to stand aside pending the outcome of the investigations into the accounting mis-statement, which relates to payments from major suppliers.

The SFO and Tesco both refused to comment.