OPEN competition between two European equities exchanges begins today, as the London Stock Exchange launches its long-awaited cut-price dealing service for traders on the Amsterdam market.

Amsterdam is one of four exchanges operated by Euronext, which has promised to hit back by offering its own cheaper dealing facility in heavily traded stocks in London this autumn.

The two sides have been skirmishing over their respective offerings to Dutch traders since the LSE announced its move a year ago.

This was prompted by complaints from Dutch brokers that they had suffered price disadvantages since their market was merged into Euronext in 2000. They also said that the electronic trading system that they had to use was unreliable.

Clara Furse, chief executive of the LSE, last week forecast that it would gain a 30 per cent market share within a year. She said that the cost of launching the new service was negligible.

The LSE said that if it trounced Euronext and gained a commanding 75 per cent share, £10 million a year would be added to its revenues.

Paris-based Euronext has hit back by cutting its prices to Dutch customers by up to 30 per cent and last week it offered effectively to pay the most active traders if they remained loyal over the next two months. “We think that we’ve cut prices enough so that most people will feel it’s not worth moving,” said a spokesman.

The struggle for Amsterdam, the world’s oldest stock market, is an important one. Investment banks around the world are pressing exchanges to cut their dealing costs.

EU legislation moving towards a single European financial services market will also make such cross-border raids easier as regulation and other processes are harmonised.

If the move into Amsterdam is successful, it is likely to be followed by other such initiatives. Ms Furse said: “We will compete for new markets as opportunities arise. We are more than ready to compete in what will truly become a European marketplace.” She refused to say which countries were under consideration.

The LSE said it had 85 per cent of the Dutch market signed up to its trading platform and that testing of this, and of settlement of deals that take place on it, had gone well. A spokesman said: “In fact, some of our customers have said to us that they think Sets (the LSE’s electronic trading system) is up to three times faster than Euronext.”

Euronext last week reiterated its aim to attack the LSE on its home ground by making a market in 120 to 150 top shares for London users on its electronic trading platform.