TESCO’S fortunes went from bad to worse yesterday as it announced a staggering 92 per cent drop in profits.

The supermarket chain had been outed earlier this month for fiddling its balance sheets.

The “miscalculation” in the company’s finances turned out to be larger than expected, with a £263 million black hole now sitting in Tesco’s accounts.

Chairman Richard Broadbent announced his plan to leave after the new figures were published.

“The issues that have come to light over recent weeks are a matter of profound regret,” he said.

New chief executive Dave Lewis echoed the sentiment. He said: “Our business is operating in challenging times.

“Trading conditions are tough and our underlying profitability is under pressure.”

It is not yet clear what the supermarket plans to do to cover the shortfall.

Mr Lewis, however, attempted to remain positive when asked about how long and how much it would take for the group to turn around.

He added: “I would hope that I could beat the timing and beat the budget.”