Japan's biggest bank is poised to enter the bidding for a stake in Lehman Brothers and may seek control of the ailing Wall Street titan.

Senior sources close to Tokyo Mitsubishi say that the possible acquisition is being treated as a “once in a lifetime” opportunity but that the notoriously conservative bank would proceed with caution.

Tokyo Mitsubishi, which has ample sources of funding for a multibillion-dollar acquisition, is expected to keep its powder dry until after Lehman announces its third-quarter results next week.

Traders believe that, in addition to its ongoing problems, Lehman's results could lead to scrutiny from analysts and investors over activities related to R3 Capital Partners, a hedge fund. R3 Capital Partners, which was established this spring by a former senior executive at Lehman and in which the bank is a “passive, minority investor”, has become the focus of concern that it may provide yet more bad news for Lehman. Lehman has consistently said that all of its transactions with R3, as an investor and a seller of assets, have been at arm's length. The bank is understood to have sold as much as $4.5 billion (£2.5 billion) of assets to R3 since May.

Lehman's problems with hedge funds mounted this week after the United States-based Ospraie Management, in which the bank has a 20 per cent stake, said that it was closing one of its underperforming funds.

Lehman has been badly dented by the US sub-prime mortgage crisis.

Dick Fuld, the chief executive, is expected to announce further writedowns at next week's results. Forecasts range from $3 billion to $4 billion, which may push losses for the six months to the end of September close to $5 billion, or more than the bank earned in the whole of 2007.

The possible emergence of a Japanese-backed capital injection comes as Lehman remains in talks with the state-backed Korea Development Bank over the sale of a possible 25 per cent stake.

HSBC denied reports that it was considering buying a stake in Lehman. A spokesman said: “We're not interested in acquiring an investment bank. We're focused on growing in emerging markets, not developing markets.”

GMAC said yesterday that it was to cut 5,000 jobs at Residential Capital, its American home loans business. GMAC is 51 per cent owned by a private equity consortium led by Cerberus. The remaining stake is owned by General Motors, the carmaker.

On Thursday, Tokyo Mitsubishi strongly played-down its interest in Lehman with an official claiming that the bank was not interested in acquiring the US investment bank.

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