In a speech to the British Bankers’ Association, Treasury minister Ed Balls announced that he will introduce legislation before Christmas to “safeguard the light touch and proportionate regulatory regime that has made London a magnet for international business”. He said the new law is “not intended to make overseas ownership of UK exchanges any easier or more difficult than it is at the moment”.

He had previously planned to add these clauses onto the slower-moving Companies Bill legislation. Balls also said he is determined to maintain “sensible and light touch” regulation of the financial sector at global and EU level.

The new regime will mean that any bidder for the LSE will face a lengthy regulatory process before a takeover can go ahead.

It has been suggested that Nasdaq has held a series of high-level, confidential meetings with the Treasury, and feels assured it would eventually secure the go-ahead.