Ferrovial further cemented its grip on BAA this morning by sending its broker and financial adviser Citigroup into the market to buy 150 million shares at 950.25p apiece.

Following a tense day of to-ing and fro-ing yesterday, the board of BAA agreed to back Ferrovial's price of 935p a share in cash, increasing to 950.25p for those investors that qualify for a 15.25p final dividend payment.

But Goldman Sachs, whose infrastructure funds lead a competing consortium, also confirmed that it had submitted a "fully financed" proposal worth 955.25p a share.

This comprises 940p a share in cash plus the final dividend of 15.25p.

Goldman said that it was "continuing to review its position" and will update the market in due course. It urged shareholders to take no action at this stage.

It is understood that Goldman Sachs is still firmly commited to pursuing BAA and is "actively" considering its position.

BAA said of the Ferrovial offer that: "The board believes that an offer at this level represents an attractive price for BAA."

Shares in BAA jumped 19p to 947p as investors digested the terms of the agreed deal, which include a £115.5 million "break fee" payable if another party launches a formal offer that is recommended by the airports group.

As well as the cash proposal, Ferrovial, has also prepared a paper alternative for investors.

Securing the backing of BAA's management - spearheaded by Marcus Agius, the chairman and Mike Clasper, the chief executive - puts Ferrovial's ADI consortium firmly in the driving seat to win control of BAA.

It makes it more likely that the British owner of seven airports, including Stansted and Southampton, will fall into the hands of an overseas owner.

However, Goldman Sachs is by no means out of the race. Although internal rules mean Goldman is prevented from pursuing a hostile takeover of the airports group, it still might try to secure a recommended deal of its own from BAA.

Goldman has sold its offer based on its arrival as a "white knight".

As it laid out the terms of the agreed deal, BAA said it had no plans to pursue a break and was a commited long-term investor, throwing its weight behind the airport group's management.

Rafael del Pino, the chairman of Ferrovial, said: "We are delighted to have reached an amicable agreement with BAA. We believe this offer represents outstanding value for shareholders and, with the proposed partial share alternative option, investors can continue to participate in the long term future of this business.

"We are commited to co-operating with current management and providing ongoing investment in infrastructure with the ultimate aim of achieving value-enhanced quality services for our stakeholders and customers."

The Spanish group, which has also been working with Australian investment bank Macquarie, had until midnight last night to make a revised higher offer to BAA shareholders after its previous £9.7 billion offer was rejected last week.

The BAA board, advised by Rothschild and UBS, has firmly stated previously that the company is worth at least 940p a share. As well as expecting a premium on top of this BAA also wanted a bid to reflect the increased value of its property portfolio.

Shares in BAA closed last night at a record 928p, taking the group's value past the £10 billion mark.

For more details on the shares click here

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