Katona was said to be “inconsolable" after she lost the 250,000-pound contract. The Mirror quoted a friend as saying: “This was really her only big pay packet. 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."
It is also understood that the recently filmed adverts featuring Katona will also be scrapped. Iceland, which had supported Katona with her personal difficulties over the last year, decided to call it off after what it called the “final straw". It is believed that the company also had “substantial" callers demanding the removal of Katona.
An Iceland spokesman said: “We have always stood by her... But following the most recent allegations, we feel it is impossible for Kerry to continue to work with us as one of the faces of Iceland advertising."