The deal, designed to ensure the vaccines are ready for next month's schools inoculation programme, would supersede a two-year supply agreement with PowderJect, cancelled last month after potency problems with batches of its product.

The Department of Health said yesterday it was discussing details of the planned contract with Denmark's Statens Serum Institut.

The Medicines Control Agency, the drugs regulator, licensed SSI to supply the UK market last week. But health officials could not confirm whether they would be able to thrash out a supply deal quickly enough to avoid having to put back the schools programme.

Critics of the government say it has delayed unnecessarily in finding a replacement BCG supplier. There is growing concern about the disruption to inoculations outside the schools programme, particularly within at-risk communities where families hail from regions with high numbers of tuberculosis-infected people.

Health centres have been left without BCG supplies since PowderJect's product recall early last month.

The Irish government struck a similar emergency deal with SSI within days of the problems with PowderJect's supplies emerging.

The British government has resisted pressure from opposition politicians to follow Ireland's policy of testing and revaccinating all 30,000 children given the faulty vaccine there.

PowderJect's £17m contract with the British government had run from April last year. Despite a continuing investigation at the company into the cause of reduced potency in batches of the vaccine, PowderJect said last month it still planned to retender for the next contract in the autumn.

Although SSI was likely to retain a portion of a new deal, PowderJect said it was confident of winning back part of it.

The incidence of TB has been rising as immunisation has declined and resistant strains have evolved.

PowderJect shares fell 11 per cent yesterday to 230p.