Michael Spencer, head of the world’s largest inter-dealer broker, ICAP, has suggested he may not sit idly by after Nasdaq’s move on the London Stock Exchange yesterday.

ICAP held abortive talks with the LSE during the summer. However, discussing ICAP’s £400 million takeover of currency trading platform EBS last year, Spencer commented : “The combination of ICAP and EBS networks provides ICAP with a distinctive capability — a high-speed global network for distribution of products that are increasingly traded around the clock.

“Almost all other businesses, the inter-dealer brokers and the exchanges, lack this global capability. Consolidation in these markets continues and ICAP remains in a very strong position.”

He added: “The group remains highly cash-generative with a strong balance sheet.”

Spencer also remarked that the inter-dealer broker market is still growing rapidly. ICAP’s profits in the six months to September rose 23pc to £120.8 million on revenues 22pc higher at £543 million. The shares rose 8.5p to 495p, valuing the business at a shade over £3 billion.

Nasdaq has made a new offer valued at £2.7 billion ($5.13bn) for the London Stock Exchange.

The LSE board has rejected the bid, claiming it undervalues the buoyant stock market, which has posted record trades and earnings in recent reports.

Nasdaq already owns more than 25pc of LSE shares, giving it a powerful advantage in the current round of consolidation deals. With the New York Stock Exchange well on its way to takeover Euronext, Nasdaq sees a liaison with the LSE as strategically crucial in its battle for business with its close NYC neighbour.

Shares in the LSE have traded briskly since the offer was made. The BBC calculates that if Nasdaq bought them all, they would have a 50pc holding in the company. That’s unlikely to be the case though.

With a proposed softening of America’s draconian Sarbanes-Oxley rules and a new bill protecting the LSE from foreign regulation from the Treasury, the major obstacles to a merger seem to be melting away.

Clara Furse and her board may have other tricks up their sleeves, not least a tieup with an exchange in the Far East — Tokyo was mentioned recently.

It’s still all to play for.

The Business Editor of the BBC last night broke the news that at least half a dozen American investment banks are in the process of setting up a giant European stock exchange to challenge the rest.

The group includes Goldman Sachs, Merril Lynch and other “household” names. They already have successful platforms for buying and selling shares, so by combining their strength and lowering prices they will pose a formidable threat to the mainstream exchanges, especially the LSE and the proposed NYSE-Euronext conglomerate.

The BBC’s Robert Peston thought the threat may make the presumed bid for the LSE by Nasdaq more likely to succeed.

With the taming of the worst features of America’s Sarbanes-Oxley regulations in prospect, the walls that have hitherto shielded an independent LSE seem to be crumbling.

The London Stock Exchange strengthened its negotiating hand in the battle for market consolidation with a 60pc increase in operating profits to £81.3 million ($154.5m)for the first half on revenues up 20pc at £163.3 million ($310.3m).

The LSE said it was on course for an “excellent” set of full-year results, and lifted the dividend by 50pc to 6p a share.

The Times (London) reported that “executives, led by Clara Furse, chief executive, and chairman Chris Gibson-Smith, were tight-lipped about their plans for the next stage of a set of international exchange mergers that centres on London, America’s Nasdaq, pan-European exchange Euronext, the New York Stock Exchange, and Germany’s Deutsche Borse”.

Gibson-Smith commented : “The exchange has once again demonstrated the value it creates for market users and for our shareholders. We are well positioned for continuing success going forward, and the results achieved in the first half of the year support our expectation of an excellent result for the full year.”

Meanwhile, Deutsche Borse also reported strong quarterly and nine-month earnings. Yesterday it pulled out of strategic talks with the Italian Stock Exchange over a joint proposal to merge with Euronext.

Clara Furse was reported as saying : “New issues, new products and net technology are combining to facilitate a structural shift in equities trading, significantly improving the quality of the market for our increasingly international customer base and creating more value for shareholders.”

It will be interesting to see what comes out of the discussions with the Tokyo Stock Exchange. These number won’t do the LSE’s case any harm at all.