Porn king Bob Guccioni has admitted he is facing financial ruin because of losses from his magazine, Penthouse.

The publisher, 71, may have to sell his New York house - Manhattan's largest - and his art collection, which features works by Picasso, Degas and Renoir, to pay his debts.

He founded Penthouse in 1965, but circulation has tumbled with competition from internet pornography. From a high of five million, it now sells 650,000 copies a month. General Media, the company that owns Penthouse, said last week that it would be unable to meet £10million debts this year. If it fails to keep up payments on a £40 million overdraft, the Bank of New York will take control and may well close the magazine.

Guccioni has used his house and art collection as security for borrowing. Penthouse lost £7 million last year, and his two general interest magazines, Omni and Longevity, both failed.

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