The company is pulling out of its non-food retailing operations, but will keep its funeral service, where it is the market leader in the UK.

Ten of its home furnishing stores trading as Homeworld and 40 Co-op Living department stores will be sold in three months' time.

The shops are being bought by new owners who will re-develop the sites for other business purposes.

Two Homeworld shops, in Hull and Norwich, are not being sold and will shut with the loss of 220 jobs.

A spokeswoman for Co-operative Retail Services said: "We are working to do anything we can to protect our employees."

The company would try to find alternative employment for them with the Co-op movement and would also be offering counselling, she added.

Privately held UK property developer Miller Group said it had bought 46 stores from the Co-op for £69m.

Thirty-six of the stores, mainly in town centres, would be redeveloped by Miller's property subsidiary, Miller Developments. The remaining 10 would be sold to Primark, the Dublin-based discount fashion retailer.

A spokesman for Miller Group said: "This is just a property transaction. The staffing issues are not really our concern."

Retail group Kingfisher, meanwhile, announced that its Chartwell Land unit was buying the 10 Homeworld stores from the CRS for £80.4m.

Kingfisher is planning to turn two into B&Q warehouses and four will be developed into general large retail units, possibly to be sold off.

Co-operative Retail Services, which has some 640 stores in the UK, was tipped as a bid target by UK newspapers over the weekend. But other parts of the organisation, which include a funeral business, travel agencies, insurance and motor dealerships, are not for sale.

The Co-op's non-food operations have been under pressure during the last three years. A major investment programme failed to improve the stores's performance.

Peter Rowbotham, who had been chairman of the Co-op Retail Service over the last six years, resigned at the weekend.