Miles Costello The Times' business correspondent says: "When Terry Smith takes full control of Tullett Prebon he will run the world's number-two interdealer broker with an expected market value of at least £1.2 billion.

"But the colourful City grandee will need all of his considerable energies to pose a serious challenge to ICAP, his number-one rival led by the equally colourful Michael Spencer.

"ICAP dominates the trading of bonds and derivatives between banks and City institutions, with staff of more than 3,500, annual profits of £250 million and a market value of nearly £3.2 billion. It is now a member of the FTSE 100 index.

"Tullett Prebon has 2,500 staff and made first half operating profits of £62.5 million on revenues of £348 million. The FTSE 250 awaits.

"Mr Smith will take on Mr Spencer, either by hiring staff or buying companies. Neither are cheap, particularly in the heated and litigious world of City brokers.

"ICAP has the advantage in acquisitions, having bought popular foreign exchange dealer EBS for £275 million in cash earlier this year. Let battle commence."