Citigroup was last night faced with a potentially explosive row over whether it will stand by its private equity client trying to buy out EMI.

The US investment bank had agreed to provide private equity bidder Terra Firma with £2.5bn of financing for the deal but is obliged to come up with the money only if acceptances by shareholders cross 90%.

Bankers working on the deal refused to say last night if the threshold had been reached. But it appeared almost certain that it would not be, partly because such a level of acceptances is rarely achieved.

Tomorrow is the deadline for EMI shareholders to accept Terra Firma's 265p-a-share offer. Once the level of backing is known Citigroup will have to decide whether to stick to its offer to help finance the deal. Usually a financial backer waives the right to pull out but given the tumult in the credit markets this week Citigroup could break with the usual pattern.

If the deal falls apart it would be a major blow to Guy Hands's private equity group, which has spent weeks waiting to see if EMI's US rival Warner will come in with a counter-bid. Warner decided not to have another go at taking over the company it had bid for several times. Rival private equity bidders also failed to come up with firm offers, seemingly leaving the way clear for Terra Firma's bid to go through.

A collapse would also be a huge blow to EMI's shareholders banking on the company finally getting bought out. It would also mean more disruption for EMI, which has been battling a tough music market and the cost base with a major overhaul.

Citigroup, Terra Firma and EMI declined to comment.