Shares in Centrica have jumped more than 3.7 per cent on renewed speculation that Russian gas supplier Gazprom is considering an £11 billion for the owner of British Gas.

More than £400 million was added to the stock market value of Centrica in early deals this morning amid heavy trading in the company's shares following two separate reports that appeared to bring a potential takeover of the group a step closer.

After an hour and a half of trading, shares in Centrica stood 11.25p higher at 313.5p, a rise of 3.72 per cent that values the group at £11.42 billion.

The dealing frenzy came after it was reported that Tony Blair, the British Prime Minister, had ruled out the idea of blocking a bid for Centrica on security grounds.

The Financial Times reported that Mr Blair had told aides he did not want to go down the protectionist routed on so-called national assets that has been controversially pursued in other parts of the European Union, in particular in France.

Mr Blair is thought to believe that any bid for Centrica should be dealt with by the relevant competition authorities such as the Office of Fair Trading, Competition Commission and European Commission.

The newspaper reported that official at the Department of Trade and Industry, led by trade secretary Alan Johnson, had responded to expressions of interest in Centrica by Gazprom by considering whether blocking legislation could be introduced.

At the same time, Alexander Medvedev, chairman of the board at Gazprom, let it be known that Centrica was part of the gas group's acquisitions wish-list as it prepares to become a "leading energy company" worldwide.

"Centrica is considered as one of our potential acquisitions but it's very difficult to find a company that is not on our watch list," Mr Medvedev told BBC World in an interview.

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