British competition watchdog, the Office of Fair Trading (OFT), said yesterday it would need more time to look at Abbey National's proposed merger with Bank of Scotland.

The OFT, which examines mergers and acquisitions, said it had extended the deadline for a decision on the deal by 15 working days to February 8th.

The OFT is also investigating rival British bank Lloyds TSB's proposed £20 billion takeover of Abbey. A decision on this is due by February 2nd, but industry sources said they expected the competition watchdog to seek a 15-day extension, moving the deadline to February 23rd.