A German magazine is reporting that German stock Exchange, Deutsche Borse has developed a plan to merge with New York-based, NYSE Euronext.

The deal, which would create thw world’s biggest stock exchange group, would combine the businesses in a holding company in the Netherlands.

According to the report, Deutsche’s Chief Executive Reto Francioni, has presented his supervisory board with proposals for the merger.

The implications for the London Stock Exchange are not entirely clear, but must be worrying given the general economic climate.

A new wave of exchange consolidations seems imminent, following Nasdaq’s £1.9bn ($3,7bn) agreed bid for Scandinavian group OMX.

Now energy market, New York Mercantile Exchange, is seeking partners for a possible $7.2bn ($14.2bn) deal going forward. Touted parties include NYSE Euronext, Chicago Mercantile Exchange and Deutsche Borse.

Nasdaq has denied that it could return for a third battle with the London Stock Exchange, but that could change come February since the American outfit already owns nearly 30 percent of LSE shares.

Recently we reported that London Stock Exchange chief executive, Clara Furse, attacked new rival on the block, Project Turquoise — a trading platform being created by seven investment banks — as non-viable.

Furse claimed the rival banks’ platform will not be able to compete with the LSE’s 4p fee from £1000 worth of shares purchased.

Project Turquoise responded, “We are very much on track to be up and running and reduce the total cost of trading for those who buy and sell shares”.

Soon, however, PT’s seven founders, Goldman Sachs, Merrill Lynch, UBS, Citigroup, Morgan Stanley, Deutsche Bank and Credit Suisse, will be joined by another, BNP Paribas of France. Already a formidable alliance, Turquoise now looks a true heavyweight.

Final details of the technology systems to power the platform are close to agreement. If the final result is cheaper trading — and it’s hard to imagine them coming in at a higher price — this will give the LSE a real run for its money.

The kind of complacency that saw London’s Liffe passing to Euronext right under Clara Furse’s nose, must not be repeated here.

Following Nasdaq’s £1.9 billion ($3.7bn) deal to buy Swedish exchange OMX, which operates in Iceland, the Baltic states and Scandinavia, Dubai has muscled in on the act.

The Dubai International Financial Centre is said to be “the world’s newest international financial centre”. It has appointed HSBC to advise it on a possible challenge for OMX.

On Friday, OMX agreed to be taken over by Nasdaq, the New York exchange, which last year made two failed attempts to buy the London Stock Exchange.

The Nasdaq cash and share deal for OMX would have created a £3.8 billion ($7.5bn) company with operations in eight countries. It would be the third transatlantic merger between exchanges in the past 12 months.

The Times (London) reports, “The DIFC’s decision to consider a counterbid further underlines the international ambitions of the tiny Gulf state. Last year, Dubai Ports World, another arm of the Dubai government, seized control of some of the world’s most important ports when it acquired P&O. The planned bid for OMX signals DIFC’s ambitions to raise Dubai’s profile in international financial markets.”

The Dubai International Financial Exchange, which opened for business in 2005 was intended to “create an environment for progress and economic development in the UAE and the wider region”.

So, the consolidation of the world’s stock markets proceeds apace. In March the New York Stock Exchange completed its acquisition of Euronext, the pan-European borse. Nasdaq claims still to have ambitions to bid for the LSE, but is prevented by City regulations from bidding again until next February.

A combination of OMX, which is being advised by Credit Suisse and Morgan Stanley, and the slightly larger Nasdaq, being advised by JP Morgan, would create a company worth 30% more than the LSE, which has a market value of £2.7 billion. OMX has a derivatives business that ranks behind NYSE Euronext’s Liffe, and Eurex, controlled by Deutsche Börse. It is considered particularly attractive by other exchanges because of its innovative financial-trading technology.

Nasdaq is planning to use new generation OMX technology as a base for the group, which would, it claims, deliver two-thirds of the £76m ($150m) that may be gained from the merger.

Dubai, however, might just have the last word.