Clara Furse, London Stock Exchange chief executive, claims it is “not if but when” the UK Government will scrap stamp duty on share transactions.

Furse said: “The question is not if, but when. There has been a significant shift in the Government’s thinking about stamp duty following a recent report by think tank Oxera, which found that the removal of the tax would be revenue-neutral. Trading remains strong with positive momentum carrying forward into the current financial year. The proven international success and increasing efficiency of our market, underline the secular change to equity trading, as TradElect goes live this summer.”

At present, investors are paying 0.5 percent of the value of their transaction when they buy shares. The tax raises around £3 billion ($6 bn) a year for the Treasury.

It appears that the LSE is in discussions with Economic Secretary Ed Balls on how to take the proposal forward.

The Exchange’s headline profits jumped 55% to £186m in the year ended March, on revenues up 20% at £350m.

The Conservatives have already said they would consider scrapping Stamp Duty on shares if they came into power.

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.

That’s the cry uttered by Alex Brummer, the UK Daily Mail’s excellent City Editor on the parlous negotiating position of the London Stock Exchange.

In a rallying exhortation to the Great and the Good of the Square Mile and beyond, Brummer duffs up the instigators of the current situation :

That the LSE should have become a pawn rather than a knight in a fight to unify the world’s bourses under global brands is madness. It ought to be in the driving seat of the consolidation.”

This website says Amen to that.

Consider for a moment the advantages currently possessed by the LSE. It’s Europe’s largest cash market. This week it overtook New York in cash raised for IPOs. In AIM, it owns the most vigorous enterprise market in the world.

Brummer writes : “London’s acceleration away from all its rivals post Big Bang in 1986 and Britain’s emergence from the shadow of euroland is one of the great success stories of the 20th century. … The latest trading statement underpins the case for keeping the LSE independent and British-owned.”

With the Chancellor of the Exchequer, Gordon Brown, and Treasury Secretary, Ed Balls, seeming to climb aboard the bandwagon, Alex Brummer is surely right to say :

“We must Save our Stock Exchange.”

Chancellor Gordon Brown and Economic Secretary Ed Balls have signalled concern over an expected bid for the London Stock Exchange by Nasdaq sometime after next Monday’s deadline, but likely to be later in the year.

The word is that a £2.7 billion bid would be referred to the Competition Commission and that may take a long while to report. The worry is that a Nasdaq-dominated LSE would lose many of the overseas listings currently flocking to London.

The LSE said : “We have a very strong business which is going from strength to strength. there are a number of strategic options we would consider.”