Record group HMV Media said it was seeing evidence of a "sustained recovery" at its Waterstone's bookshops - but kept mum about whether the chain would be sold.

Its stores in Oxford and 200 other towns, which faced a tough year last year, saw like-for-like sales for the 12 months to April 28 rise 0.7 per cent, while for the 12 weeks to July 21, sales rose 3.3 per cent.

Sales had been helped by "tighter management focus on the basics of good bookselling" and the stabilisation of the market after changes such as the rise of online bookselling. Waterstone's has faced much speculation over its future in the past year.

In March, HMV rejected a £180m bid by Waterstone's founder Tim Waterstone to buy back the chain.

There has also been speculation German group Bertelsmann, bookshop chain Borders or book retailer Ottakers could buy the firm.

HMV chief executive Alan Giles would not confirm if talks were being held with interested parties or comment on Waterstone's future.

However, he said there was still a chance that the whole HMV Media group would float on the stock market.