Euronext has announced that it supports a proposal to merge its stock exchanges with Deutsche Borse and Borsa Italiana, as long as it is part of its merger with the New York Stock Exchange.

The intriguing possibility now opens up of an even bigger transatlantic giant emerging to challenge the London Stock Exchange.

With Nasdaq in talks with the hedge funds which own 30pc of LSE shares and a figure of 1300p being bandied about as the cost of buying out these shares, it’s beginning to look like two great pan-Atlantic exchanges may emerge over the next 12 months.

Unless, that is, Clara Furse can find a white knight to save the old LSE.

Euronext, the Pan-Continental stock exchange, is said to be pressing on with its plans to merge with the New York Stock Exchange. Final clearance should be obtained by January.

Suggestions that Euronext may walk away from the NYSE deal in favour of a tie-up with Deutsche Borse and Borsa Italiana, have been scotched by a number of sources.

Meanwhile, the London Stock Exchange waits on the next move by Nasdaq, which can now launch a full bid for the LSE, if that’s its intention.

As reported on Sunday, the supervisory board of Deutsche Borse has announced new concessions in its continuing bid to merge with Euronext.

The German exchange’s initial offer, valuing the pan-Continental conglomerate at around €8 billion (£5.5 billion), was rejected by the Euronext board, which opted for an agreed merger with the New York Stock Exchange.

After a board meeting last night Deutsche Borse presented a new set of proposals designed to create a federal structure, with power devolved to the constituent exchanges at Lisbon, Amsterdam, Brussels and Liffe, the London financial futures market.

The financial side of the bid remains the same, however, but a statement claimed that share-price movements since the terms had been announced meant that it was now higher than the NYSE offer.

The Times (London) reports:

The latest German offer proposes:

* A new Dutch company to own Euronext and the Börse.
* Regulation of the Euronext exchanges to remain where it is at present.
* The board to be drawn equally from both sides. The earlier boardroom structure strongly favoured the Germans.
* Divisional management to be split so that information services were run out of Amsterdam, equities from Paris and derivatives from London and Frankfurt, where the Börse already has Eurex, a strong derivatives operation.
* Leadership split between Amsterdam, Frankfurt and Paris.
* The Euronext trading platform NSC to be used for equities, while Liffe would use Eurex and abandon its Liffe.Connect platform.
* The Borsa Italiana in Milan, which is already negotiating to join Euronext, would be brought on board shortly.

It looks like the London International Financial Futures Exchange (LIFFE), which the London Stock Exchange should have secured for itself, will now be branded Euronext LIFFE by the new transatlantic stock market, NYSE Euronext.

The Telegraph comments: “London is to be at the heart of the NYSE-Euronext merger despite the fact the London Stock Exchange has been shut out of the £11bn transatlantic combination. Euronext LIFFE — the London International Financial Futures Exchange — is being strongly considered as the name under which the group’s entire derivatives business could be branded.”

Hugh Freedberg, Chief Executive of Euronext LIFFE, said: “There are clear opportunities in the way we brand the business. Euronext LIFFE is very well known in the derivatives markets here and in the US, and the NYSE is obviously a strong brand. It is a question of using the two brands in the way that is most appropriate. It’s great for London as it is the main focal part for the Euronext LIFFE business and that of the wider group.”

The new group’s derivatives business is said to make up 17pc of its revenues. The Telegraph says: “The strength of Euronext’s derivatives business and its fixed income platform, through MTS, which it co-owns with Borsa Italiana, is one of the key reasons the NYSE chose to merge with Euronext and not the LSE in the first place.”

The LSE is beginning to look more than a little flat-footed these days, and not a tad vulnerable to more than just Nasdaq. Is Deutsche Borse now a busted flush, or could we see yet another move into the market, maybe even a nostalgic glance or two towards London?