Rio Tinto will this week demand that the Takeover Panel instruct BHP Billiton to submit a formal offer or walk away from its £67 billion proposed offer for the Australian mining group.

The move is an attempt by Rio to a draw a line under several weeks of febrile speculation since its larger rival revealed its intentions last month. Tom Albanese, Rio's chief executive, said last week that the unwelcome proposal was "dead in the water".

Blackstone, the American private equity group, was today reported to be considering a break-up bid for Rio that would see its core iron ore business sold off. But Blackstone sources have denied that they are planning a bid.

Baosteel, the Chinese steelmaker, was forced last week to deny that it was mounting a counter bid.

Rio Tinto are expected to write a letter to the Takeover Panel, requesting they ask BHP "put up or shut up", later this week. The Takeover Panel would then issue a deadline for the bid, likely to be mid-January.

BHP, the world's second-largest miner, claim a merger with Rio, the third-largest, would result in £1.7 billion savings annually. Rio claim the proposal undervalues it and that the synergies are optimistic.

A takeover would create the world's biggest minging group, worth £166 billion.

Rio Tinto shares were up 38p to £57.84 at close.

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