The quoted price of London Stock Exchange shares stood at 1250p ($21.75) on April 18, 2006 at 14.00 hrs GMT.

After all the turmoil of the past few months, the New York Stock Exchange is beginning to emerge from the fog of renewal and reorganization to join Nasdaq in casting a shrewd and beady eye across the Atlantic to the ancient institution at the heart of the City of London.

The London Stock Exchange must feel its ears burning with all the global chatter mustering around its fate. After Nasdaq’s preliminary thrust, rapid withdrawal, then silent grab for territory, Clara Furse will be wondering what’s going to come her way next. Wonder no more, Clara, the NYSE has at last plighted its troth, or at least its first tentative intentions are becoming vaguely clear.

In a statement, the NYSE said: “We are currently engaged in discussions with certain participants, although no definite terms have been discussed or agreements reached.” I think we’re beginning to get the picture.

All interest today revolves around Nasdaq’s next move. It will be entitled to lift its shareholding from just under 15 percent to just under 30 percent without triggering a full-blown bid. If it does, it will hold most of the aces in the game to control the London exchange.

The ghost at the feast, though, is Sarbox — the American Sarbanes-Oxley rules feared by businesses worldwide for their eye-watering toughness. Much of London’s business advantage could be shed if the US SEC decides it must comply with its regime rather than the UK’s declaration of honesty rules and light-touch regulation.

Isn’t it time the British Treasury intervened just a little here to stiffen up the LSE’s resistance in the face of constant attacks on its independence and integrity?

The UK Financial Mail is warning of regulatory chaos if Nasdaq or the New York Stock Exchange succeed in taking over the LSE.

The Mail reports: “Secret legal advice given to a potential bidder for the London Stock Exchange warns of a regulatory tangle lasting years if the LSE is taken over by an American exchange. The document, seen by Financial Mail, says that the LSE will face extra costs from a tie-up and that there is no way it could avoid American regulations.”

The legal advice is said to conclude that a merger between the LSE and an American exchange would not work. Of course, if the advice was given to a rival for the LSE, an element of spoiling may have crept in here, especially as it contradicts an earlier story in the Mail last week that a deal was possible between the British FSA and the American SEC on light-touch interference across the Atlantic.

However, Angela Knight, Chief Executive of APCIMS, the stockbrokers association, said: “I am very aware that there is legal opinion circulating that warns about the negative consequences of American rules creeping into London.” She calls for “absolute guarantees”, and says: “Any agreement between both sides should have political agreement as well.”

Once again this saga shimmies into another shape, leaving the principals wondering where to turn next. This week the LSE’s Clara Furse, will hold talks with the Nasdaq chief, but will also keep in touch with the NYSE and Euronext.

As usual, anything could happen.

According to City journalist Alex Brummer, “The informal word is that a deal between the Financial Services Authority [FSA in the UK] and the Securities and Exchange Commission [SEC in the US] would cement the FSA’s place as the listing authority in London and the SEC’s in New York.”

That would certainly remove the major barrier to a tie-up between one of the American exchanges and the London Stock Exchange. At a stroke, the Sarbanes-Oxley rule-based regulation would be taken out of the equation for firms listed on the London Stock Exchange.

Although this would remove the LSE’s main competitive advantage over Nasdaq, it would also clear the way for a takeover or merger.

While the New York Stock Exchange is of necessity hanging fire because of its top-to-toe reorganization, Nasdaq has hoovered up some 15 percent of LSE shares, creating a floor, under the price that may eventually be paid, of 1175p per share.

A takeover is beginning to seem inevitable unless London reacts by buying a smaller exchange to render it free of threat.