UK cable operator NTL today refused to increase its £817 million takeover offer for Virgin Mobile, which was spurned by the telecoms firm's independent directors earlier this week.

NTL said its bid for Virgin Mobile represented better value than any stand-alone alternatives. It also reserved the right to put in a lower offer if it wins the backing if Virgin Mobile's board, or if any other bidder emerges with a cut-price deal.

Simon Duffy, NTL’s chief executive, was in New York today to lead the cable giant’s quarterly board meeting, where the second approach for Virgin Mobile was a main topic of discussion.

In a statement to the London market, his company noted "recent announcements by Virgin Mobile and the statements by Virgin Group, of which NTL had no prior knowledge".

It continued: "NTL continues to believe that its potential offer at 323p per Virgin Mobile share represents better value, for all Virgin Mobile shareholders, than Virgin Mobile's stand-alone alternatives and will make a further announcement in due course, if and when appropriate."

On the London Stock Exchange, shares of Virgin Mobile fell as much as 12p to 343p in reaction to NTL's statement. They then rebounded to stand unchanged on the day at 355p.

Virgin Mobile had been hoping that NTL would raise its offer closer to £4 a share, having rejected the cable group’s approach of only 323p.

Sources close to Virgin Mobile yesterday said the company has a bid value of more than the current market capitalisation, which stood at £917 million last night.

Many in the financial community had also expected NTL to increase its offer.

One senior banker said: "In banking speak, ‘materially undervalued’ (the term used by Virgin Mobile in its statement on Wednesday) usually means the company wants to see an increase of at least 10 per cent on the first offer, which would see a bid of at least 355p per share."

Sources close to Virgin Mobile insisted last night that the company was worth nearer 400p a share. The sources said the group had not yet decided at what level it would be willing to accept an offer from NTL and would not form an opinion until it received another offer, if at all.

Virgin Mobile put out a statement yesterday dismissing speculation that it had solicited a higher bid from NTL after Sir Richard Branson, its top shareholder with a 72 per cent stake, said only £25 million stood between NTL and a deal.

Sir Richard said yesterday: "We have got small shareholders in Virgin Mobile who must be protected. That is why we are leaving it to the independent directors and did not send our own directors to last night’s board meeting."

Then Sir Richard appeared to reveal the independent directors’ thinking. He said: "We’re talking about a £25 million difference between what the independent directors are talking about and what NTL have offered."

Analysts believe Sir Richard was talking about an improved offer that would translate into an extra £100 million on the offer price, £25 million of which would go to institutional and smaller shareholders.

The statement said that the board "only considered the 323p per share potential offer price announced by NTL; it did not consider any other price, nor did it solicit any other price".

City sources have suggested that the Takeover Panel would want to take a close look at what Sir Richard said and his relationship with the company.

Sir Richard also said a tie-up with NTL was likely to be named Virgin Television and that the quad play of TV, broadband and fixed and mobile telephony would "give Sky a run for its money and create a strong alternative in Britain".

Sir Richard has given NTL a verbal agreement to accept the deal for his stake and said that he would take the bulk of the proceeds in NTL shares. If successful, a merger of NTL-Telewest and Virgin Mobile would create a group with some nine million customers.

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