The Dubai stock market and Nasdaq, the New York exchange, are expected to announce a deal today to derail a proposed £800 million purchase of Nasdaq’s stake in the London Stock Exchange by Qatar.

The Qatari government investment vehicle is the only bidder to have made a firm offer for the stake, put up for auction by Nasdaq last month, and is thought to have offered £14 a share.

However, Nasdaq, which is vying with Dubai to bid for another group of bourses, Stockholm-based OMX, has suggested a complex deal whereby Dubai would end up with the LSE stake.

This could leave Nasdaq to buy OMX, while Dubai would retain its existing 28 per cent stake in the Nordic and Baltic exchanges operator. Alternatively, Nasdaq could withdraw and Dubai bid, giving the Americans a stake in OMX in due course.

Any outcome would create an axis of linked stock markets from the Middle East through Scandinavia and the Baltic states to New York. Such an axis would be well placed to add London to its list by way of a hostile bid, several of which the LSE has already fought off.

Acquiring Dubai as a major shareholder would be a severe disappointment for Clara Furse, the LSE’s chief executive, and the rest of its board, because the Qataris were seen as the most attractive bidder for the stake.

So close is the relationship of London and Qatar that the LSE has for a year been negotiating with the Gulf state to provide technical and other support in its efforts to set up its own exchange and financial centre in Doha, Qatar’s capital, The Times can reveal. This would rival a similar project that is more advanced in Dubai.

The 31 per cent stake in the LSE was amassed by Nasdaq during a takeover bid that failed in February. Even if this is transferred to Dubai, London is expected to forge ahead with the Qatari link because this is seen as complementary to any stakebuilding by Qatar.

Development of the Dubai financial centre has been hit by difficulties, not least a dispute that saw the ousting of its British regulator, Ian Hay Davison. London believes it is in a position to ensure the exchange in Qatar adopts a tax and regulatory regime of the highest standard. It is also clear to London that the Qataris offered to buy the stake as a supportive long-term investor, with no prospect of a hostile bid.

OMX shares were suspended in Stockholm last night pending an announcement today expected to confirm a potential Nasdaq-Dubai alliance. LSE shares rose 42p to £14.53, well above the cash on offer from Qatar. Parties involved would not comment.

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