LSE relief at tie-up 'hit'

London's trading exchanges were today breathing a collective sigh of relief over the likely collapse of the merger between the German and New York stock exchanges.

The London Stock Exchange and Icap had been among vocal critics of the planned tie-up between Deutsche Börse and NYSE Euronext, which looks set to collapse following a European Commission ruling.

Publicly, Britain's exchange businesses did not want to comment. Privately, however, sources expressed relief.

Said one: "Combined, this was a business that could have shut out all competition especially in (post-trade) clearing."

However, they warned that the deal was not dead yet: "Deutsche Börse is a very political organisation. We expect a lot of arm twisting to try and revive the deal." The commission said it would block the merger unless the pair were prepared to sell London's derivatives market
Liffe or Eurex, Deutsche Börse's derivatives platform.

The pair have previously ruled
out such disposals as they would undermine the whole point of the tie-up.