Suntech, one of the world's biggest solar panel manufacturers, has defaulted on a $541m (£358m) bond payment in the latest sign of the financial squeeze on the struggling global solar industry.

Suntech Power Holdings' announcement was a severe setback for a company lauded by China's Communist government as a leader of efforts to make the country a centre of the renewable energy industry. Its founder, Shi Zhengrong, became one of the industry's most prominent entrepreneurs and a billionaire, only to see most of his fortune evaporate as the company's share price plummeted.

The company is "exploring strategic alternatives with lenders and potential investors," David King, who replaced Shi as a CEO last year, said in a statement.

Suntech was due to make a $541m bond payment on Friday but ran short of cash following heavy losses over the past year.