Australian group Macquarie Bank is expected to decide within weeks whether to bid more than £1.4 billion (€2 billion) for the London Stock Exchange (LSE), amid internal concerns that the Australian group may not be able to apply its unique investment style to the LSE.

Any offer could pit Macquarie against European exchanges including Euronext, Deutsche Börse and possibly the Swedish group OMX, which have expressed interest in the LSE.

Macquarie, whose acquisitions have transformed it from a traditional investment bank into a group which rivals private equity houses, yesterday said it was in "the most preliminary of stages" of considering a bid for the LSE.

The Australian group, which owns infrastructure, airport, and media assets, said there was no guarantee it would launch a bid.

Any offer would probably be in cash and in a consortium with other investors, officials at the group indicated.

These might include companies which have expressed an interest in the LSE before, and other private equity groups, bankers said.

The LSE yesterday "noted" the Macquarie statement, believed to have been made at the request of UK regulators, but stressed it had not received any formal offer.

Nevertheless, its shares rose 4.7 per cent to 578p, their highest level since February this year. They hit a record 600p last December, when Euronext indicated that it wanted to bid for the LSE, challenging a previous offer from Deutsche Börse.

The German exchange was subsequently forced to drop its bid, following opposition from its shareholders. And in late July the Competition Commission, the UK watchdog, indicated that it might block a takeover of the LSE by Deutsche Borse or Euronext unless they reduced their involvement in settlement and clearing operations.

However, some observers believe that any bid by Macquarie might face fewer regulatory hurdles.

It is understood Macquarie has looked at the LSE and other European exchanges to broaden its investment activities and increase its international presence.

However, the Australian group is believed to harbour concerns that stock exchanges may not fit its investment strategy.

Allan Moss, Macquarie chief executive, recently said the company wanted to buy more assets in the UK, where it already owns motorways, water and gas utilities, and the recently acquired BBC commercial multimedia business.