Barclays, has been told by Atticus Capital, a New York-based hedge fund that owns shares in the UK bank, to drop its €65 billion (£44 billion) agreed bid for Dutch group ABN Amro or face growing opposition from activist shareholders.

Atticus, chaired by Timothy Barakett, has amassed a 1 per cent stake in Barclays worth about $1 billion (£508 million). It has promised the bank that it will vote against the merger and encourage other investors to veto the agreed deal, unless Barclays walks away.

The fund has written to Marcus Agius, the chairman, and held a series of meetings with him and other senior executives in which it said that Barclays would not be the best owner of ABN's assets. Atticus claims that Barclays shares are undervalued and would rise if the bank dropped its bid.

Barclays' shares rose 20p to 742.5p in early trading.

Representatives of the hedge fund, which has a track record of success from its run-ins with quoted company executives, have also met Naguib Kheraj, Barclays' former finance director - who remains a consultant - and the president and head of its Barclays Capital investment bank, Bob Diamond.

It is understood the two sides met late last week and that channels of communication are open.

But Barclays, which has discussed the ABN deal with more than 100 of its shareholders said it had no intention of dropping the bid. "The views expressed by Atticus Capital LP are not representative of the feedback we have received from shareholders who remain supportive of our strategy," it said. "If other shareholders feel differently, we encourage them to engage in a dialogue with us. We believe this transaction will create significant incremental value for our shareholders and meets our rigorous financial criteria."

It is thought that shareholders saw the rationale for a Barclays takeover of ABN but expressed reservations about the dangers of it overpaying. It is understood that Atticus is so far the only activist investor to have expressed its opposition to an ABN takeover.

Barclays is known to have been in contact several times in the past two months with TCI, the hedge fund that triggered the sale of ABN. Equipped with a shareholding of about 1 per cent, TCI wrote to ABN in February submitting five special resolutions to a vote at its annual meeting, including that it should explore the idea of a sale or break-up.

A withdrawal by Barclays would leave the way clear for a consortium led by Royal Bank of Scotland to take control. RBS, working with partners Fortis and Santander, has tabled an offer for ABN worth €71.1 billion.

It is not known whether Atticus has stakes in either of the consortium member banks or if it is supportive of the terms of their offer.

TCI and Atticus were both instrumental in forcing Deutsche Börse, the German stock exchange operator, to cancel its bid for the London Stock Exchange and oust Werner Seifert, its chief executive .

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive