The court ruled that LetsBuyIt must raise 4m euros of extra funding by Thursday 25 January or face enforced liquidation.
But the lifeline comes on a gloomy day for dotcoms, with virtual store eToys closing its doors to European business and search engine Altavista slashing jobs.
The management of LetsBuyIt decided to legally oppose its bankruptcy which was declared by court administrators on Wednesday, hoping that a last minute buyer would arrive.
The company, which is run from London but had operated in 14 European countries, tried to attract customers by promising lower prices if more people decided to buy the same item.
320 staff across Europe stand to lose their jobs if LetsBuyIt fails to find the extra cash and is declared bankrupt.
Fighting to the bitter end
But eToys has given up its European aspirations, and pulled the plug on all its European operations.
Prices of toys on the site have been slashed by as much as 75% in recent days, with eToys trying desperately to ditch stock ahead of the shutdown.
And the latest news from the Internet search giant Altavista also demonstrates the tough times facing the dotcom world.
The US-based firm will slash its work force by 25%, laying off 200 people, because of sluggish online advertising demand.
2000
May: Opens Irish site, 14th in Europe
July: Floats at price of 3.50 euros. Shares reach 6.50 euros on first day of trade
Aug: Sheds 20% of staff
Dec: Seeks court protection from creditors. Administrators appointed. Stops taking customer orders.
2001
Jan: Board resigns, files for bankruptcy
Rising sales
Some analysts argue that LetsBuyIt had a good business model, but it simply ran out of cash before it had the chance to prove itself.
Ironically, the firm recently reported record fourth-quarter sales, thanks to strong pre-Christmas trading.
Total European sales for 2000 would be five times as high as those for 1999, the firm said.
Similarly, eToys reported that European Christams sales had more than doubled.
But increased trading does not necessarily spell success.
Internet start-ups need to make a big enough profit margin on their sales to pay-off the high costs of setting up a new business.
And dot.coms have to turn their business around before the investor funds are used up and there is no money left to keep operations running.
Despite the large number of sales, LetsBuyIt was still running at a loss and needed extra funds on top of the 66m euros raised on its flotation last summer to see it through to profitability.
Shy buyers
And shares in the online store doubled on Friday 12 January when two rival firms revealed they were considering takeover plans.
But despite the high expectations, neither French-based Dealpartners.com nor Norway's CoShopper came forward with a firm bid.
LetsBuyIt, while listed on Germany's tech-heavy Neuer Markt exchange, is managed in London and registered in Amsterdam.
It was founded in Sweden in January 1999 by entrepreneurs including John Palmer, a former Mattel Toys executive who took control of the firm a week ago when the board resigned.
LetsBuyIt has a market value of 7.53 million euros compared with 115 million euros just six months ago.