The former Atomic Kitten singer Kerry Katona was given a final deadline yesterday to pay off the rest of a £417,000 tax bill, amounting to £157,000, or go bankrupt.

Her lawyer Luke Harris persuaded the court to give her until August 7 to pay, saying Katona, who was not in court, could not meet the full amount because of 'changed circumstances', but she was expecting payments of £472,000 before the end of August.

He said she was also strenuously seeking to remortgage her properties but there would be no need if the money came – ‘I would ask for one final indulgence by the court'.

Henderson Collymore, representing HM Revenue & Customs (HMRC), said it did not want another adjournment and his instructions were to seek a bankruptcy order.

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