Nomura, the Japanese securities group, has beaten Barclays to be chosen as the preferred bidder for Lehman Brothers' European equities and mergers advisory business, potentially saving at least 700 jobs.

It is the second time today that Nomura has trounced Barclays in the fight to gain control of the bankrupt US bank's assets, after the Japanese giant acquired the Asian business for $230 million.

PricewaterhouseCoopers (PWC), the administrator of Lehman's assets in the UK and continental Europe, said today that it was entering exclusive talks with a single bidder interested in buying large swaths of the business.

Nomura tabled a bid yesterday to buy the equities and M&A businesses of Lehman while Barclays made an offer to buy the equities business alone. Both firms indicated that they had plans to safeguard hundreds of jobs.

Dan Schwarzmann, a partner at PwC and a joint administrator, said: "We have now focused on one party as they are interested in acquiring a wider team, which should result in a better deal for staff and creditors of those businesses.

"Given the complexity of Lehman Brothers, these negotiations are difficult but I'm hoping to give certainty to all involved as soon as possible."

It is understood that Barclays has dropped out of the race. The British bank is likely to return to the fray to try to recruit select bankers from Lehman's European businesses.

PwC is likely to name Nomura formally once a deal is agreed.

Lehman Brothers filed for administration in Europe and Chapter 11 bankruptcy protection in the US early last week after failing to agree a full sale.

Barclays was one of several parties interested in the entire investment bank, but backed out when the US Government refused to guarantee Lehman's mortgage-backed assets.

Barclays subsequently acquired Lehman's US operation for $1.75 billion.

Losing out to Nomura represents a setback to Barclays. The bank has agreed to pay about $2.5 billion in bonuses to Lehman's US staff in a move that infuriated the London workforce.

It is understood that a deal with Nomura was the clear favourite of Lehman's European management.

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