Mike Ashley’s Sports Direct has offered to bail out Debenhams with an interest-free £150m loan in exchange for an additional 5% stake in the company, on top of a prior demand to make Ashley chief executive.

Sports Direct set out its one-year loan proposal as an alternative to a £150m loan Debenhams that said this week it was negotiating to obtain from existing lenders as the department store chain battles for survival.

Ashley’s group said the loan would be interest-free if Debenhams issued shares that would enable Sports Direct to increase its stake from just under 30% to 35% without having to bid for the rest of the company. If it could not increase its stake, Sports Direct said, its loan would come with 3% interest charges.

Under Takeover Panel rules, a shareholder with 30% or more of a company must make a bid for the whole group, but this can be sidestepped via a “whitewash agreement” that would have to be approved by independent shareholders.

The loan offer is Ashley’s latest tactic in a battle with Debenhams and came hours after he accused the company’s board of putting out “deliberately misleading” statements.

In a letter sent to the department store chain after it was informed of plans for a profits warning on 5 March, Sports Direct criticised the Debenhams board for changing its view only a few weeks after publishing a statement saying the company was “on track to deliver current-year profits in line with market expectations”.

The letter claimed that the board and chief executive of Debenhams had “no place leading a plc or in making public statements to the market”, as its 10 January statement had proved “at best impossibly optimistic or at worst deliberately misleading” given that it had soon after put out a profits warning despite an improvement in sales performance.

Sports Direct suggested that the majority of shareholders’ interests were being undermined by “continued misleading public statements and cloak and dagger actions in the refinancing process”.

Sports Direct is trying to turf out all but one of the group’s directors and install Ashley, its founder and chief executive, as CEO. Sports Direct announced the attempt to install Ashley last week.

Ashley has gone to war with Debenhams since it rejected his offer of a £40m loan before Christmas and turned to its existing lenders to borrow the money instead.

The company saw the proffered loan, and Ashley’s subsequent actions including ousting its former chairman, as an effort to win control of its business on the cheap.

The Sports Direct boss has made no secret of his desire to bring Debenhams closer together with House of Fraser, the department store he bought out of administration last year.Debenhams said in a statement on Wednesday: “We reject these unfounded and self-serving complaints. Debenhams’ board has taken advice at every stage in order to ensure that its announcements have been consistent with the disclosure requirements. The company is seeking to execute a much-needed restructuring – in the interests of all stakeholders – while its biggest shareholder tries to undermine the process at every turn.”

The company has partly blamed financing costs for its profit warning, while the battle with Sports Direct has rattled suppliers, causing them to demand more upfront payments.

But Sports Direct questioned whether “fiduciary duties are being carried out” by the Debenhams board as it said the company was paying a “huge” rate of interest, of 5% above the interest rate benchmark, on its £40m loan from the banks and was likely to pay a similar amount on any further short-term loans.

The letter provides an insight into the toxic relationship that has developed between the two sides, revealing that Sports Direct reported Debenhams to the UK Listing Authority and the financial services regulator after being given a preview of the planned profit warning.

Ashley got an early sight of the profit warning as part of limited financial information from Debenhams that he has been receiving since signing a non-disclosure agreement several weeks ago as the company’s board attempted to draw him into its rescue bid.

Debenhams is attempting to refinance £520m of debts that are due to expire next year.