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.

With the London Stock Exchange partially trussed up by Nasdaq — with a 25pc shareholding — the American exchange has been casting its newly roving eye elsewhere, specifically, to the Far East.

In the last few weeks Nasdaq has arranged co-operation deals with exchanges in Korea and Shanghai and with the Tokyo-based Jasdaq.

The New York Stock Exchange, not to be outdone, is also seeking a deal with the Tokyo Stock Exchange which will link the world’s two biggest markets through a 10pc share swap.

Where does all this leave the LSE?

Clara Furse, chief executive, is reportedly basing her defence on some great trading numbers and fundamentals to be announced shortly. Next week’s financial results will put the spotlight on strong IPO figures, high levels of trading and good transaction numbers on SETS, its electronic trading system.

It would be reassuring, however, to see the LSE spread its wings a little and become more predatory — like the Americans. A bit more ballast might help its fight to stay independent.

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.

At last Clara Furse and the board of the London Stock Exchange are waking up to the threat of Nasdaq and Sarbanes-Oxley regulation. It seems they are looking for a “white knight” among private equity firms.

Meanwhile, the prospect of a direct takeover of OMX, the Scandinavian and Baltic exchange operator and former bidder for the LSE, has been around for a while and seemed dormant. But as the LSE hummed and hah’d, fiery Nasdaq has let it be known that it too may bid for the company. Mysterious.

Alex Brummer, the UK Mail’s City Editor, opines : “Under the stewardship of Clara Furse we have an LSE which has enriched investors but lost global standing.”

Now we are being fed the notion that an almost £3 billion ($5.5bn) management buyout, led by Clara Furse herself and backed by private equity, would keep the aspidistra British flag flying over London soil.

Well, it’s better than nothing. Let’s see some action though before October 2 when Nasdaq is handed the golden arrow. And a deal with OMX would help protect the LSE from the new Euro-American conglomerate even now thinking ahead to its demise.