JOHN THAIN, the head of the New York Stock Exchange, told Clara Furse, his counterpart at the London Stock Exchange, in a telephone conversation last week that he favoured friendly mergers as a means of consolidating the industry, rather than hostile takeover bids, The Times has learnt.

The call was intended to draw a distinction between the NYSE and an unwelcome approach from Nasdaq, its rival.

Mr Thain’s cryptic remarks, made at a time when the NYSE’s own flotation severely limits what he can say, will be seen as the strongest sign yet that the NYSE wants to strike a merger with the LSE that would fend off a potential revival of a hostile bid from Nasdaq.

Strict Takeover Panel rules governing what companies can say about potential mergers or takeover targets would have prevented Mr Thain from being any more specific about his wish to forge an alliance with the LSE.

An LSE source said last night that Mr Thain and Ms Furse had talked on the phone last week on the topic of mergers and takeovers. The source added that Mr Thain had made clear that the NYSE wants to play a leadership role in international consolidation. “They made their wishes clear but they did not go as far as saying what they will or will not do,” the source said.

The NYSE revealed over the weekend that it was in talks with a number of different companies, but declined to give further details. Its statement said: “We are currently engaged in discussions with certain participants, although no definitive terms have been discussed or agreements reached. We intend to continue to engage in strategic discussions.”

The admission came only days after Nasdaq bought a 14.9 per cent stake in the LSE, after being rebuffed last month. It is understood that Ms Furse asked Bob Greifeld, the Nasdaq chief executive, to withdraw his takeover offer last month until the LSE had completed its planned return of capital to investors.

“Once that was done, she suggested coming back to the table to talk about a friendly merger with a clean sheet,” the LSE source said. Mr Greifeld refused and instead lodged a hostile bid.

Nasdaq’s strategy is seen by some analysts as forcing Mr Thain’s hand. “It is a given that Thain is wondering whether he needs to move now to avoid being frozen out of the European landscape,” the LSE source said.

The LSE declined to comment last night. The NYSE did not respond to questions.

The NYSE is forbidden from making any public statements about specific events until it has completed its expected $2 billion (£1.1 billion) share offering, which is expected within the next two weeks.