Following excellent first-quarter results, in which revenues leapt by 25pc, London Stock Exchange Chairman Chris Gibson-Smith has sounded a warning about a possible takeover by Nasdaq.

The imp in the hearth remains U.S. Sarbanes-Oxley regulations which could add millions of pounds in bureaucracy to London’s costs and hit the LSE’s buoyant business. Despite the FSA’s talks with its American counterpart, the SEC, worries have not been dispelled.

Gibson-Smith is reported as saying: “We fully understand that London’s stakeholders do not want a combination of exchanges that might lead to the import of unsuitable regulations and incompatible market models.”

Now if London can be as decisive in its own interests as Bob Greifeld has been in Nasdaq’s, the LSE may yet turn the tables. Euronext might be seen as having drunk from the poisoned chalice, and London could power away on a tide of new business.

The news that the Financial Services Authority led by Callum McCarthy is to face scrutiny by the National Audit Office is causing frustration in some quarters of the City of London.

Leaving aside a number of recent decisions, which have placed the FSA on the back foot, McCarthy believes he needs City backing in his attempt to keep regulation of London’s major markets, like the London Stock Exchange, within London’s own rules.

He believes the notion of regulation of an exchange, whether Liffe or the LSE, transferring to where the assets are owned will fail on “legal, practical and political grounds”.

Alex Brummer in the Daily Mail writes: “The idea, for instance, of the Liffe market being regulated from Paris where Prime Minister Dominique de Villepin believes it his job to reorganize the board of Airbus maker EADS — is ludicrous.”

Sir Callum McCarthy joined the FSA in September 2003 from the Office of Gas and Electricity Markets where he was Chairman and Chief Executive. He had previously held senior positions in Barclays Bank, BZW and Kleinwort Benson, as well Department for Trade and Industry.