Kerry Katona's advertising deal with Iceland was her last substantial form of income, it's been claimed.

The supermarket chain terminated the former Atomic Kitten star's contract this week following the publication of pictures allegedly showing her taking drugs.

Now friends of Katona have voiced concern over her financial situation amid reports that the deal was worth £250,000 to the star.

"This was really her only big pay packet,” a source told the Daily Mirror. “She is already bankrupt and this is the worst thing that could have happened to her.

“You have to ask how Kerry will ever get a big deal like this again."

A spokesman for Iceland said yesterday that it was “impossible” for Katona to continue in her position.

Katona has refused to comment on the pictures, but a spokesman said she was “consulting her lawyers”.

Kerry Katona's worst moments