Plans to take Clear Channel, the radio and advertising billboard group, private appeared to be on the brink of collapse last night in a move that could see Bain Capital and Thomas H. Lee, the private equity groups, forced to pay a $500 million break fee.

The abandonment of the $19 billion deal would mark the latest casualty for leveraged buyouts that were signed off before the credit crisis erupted. It is believed that the two private equity groups sponsoring the $19 billion delisting and the banks who agreed to fund the deal have failed to agree terms. Citigroup, Morgan Stanley, Deutsche, Credit Suisse, Royal Bank of Scotland and Wachovia had all originally signed up to back the deal.

It is not known whether the banks and the two private equity firms have agreed to split the break fee or whether the cost will be met by Bain and Thomas H. Lee, which are legally responsible for it.

Under the original plans, the six banks were to fund $16 billion of new debt to take Clear Channel private.

Fears that the deal was about to fall apart triggered a sharp drop in the group’s shares in after-hours trading in New York, with the stock down by more than a fifth to $25.75. The deal, which has been plagued by delays since it was announced in November 2006, was scheduled to close on March 31.

The Clear Channel buyout remains the largest pending buyout in the US, according to Dealogic, the Wall Street data specialists. Clear Channel is the largest radio station operator in the United States and a billboard giant, with roughly one million signs world-wide. Last night Clear Channel and Bain failed to return calls. Deutsche and Citigroup declined to comment.

This month, Congress said that it would be keeping a close eye on telecom and media private-equity deals. in coming months. Ed Markey, the chairman of the House telecom subcommittee, said he was scrutinising the Clear Channel deal to make sure that “longstanding telecommunications policies would not be put at risk”.

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