Barclays and several other large European banks have approached ABN Amro about a takeover as the embattled Dutch bank attempts to fight off a campaign by activist investors.

Barclays is presenting itself as a "white knight" that could rescue ABN Amro from a break-up, although its approach is understood to have been preliminary. The British bank is expected to confirm its interest today in a statement to the London Stock Exchange.

Adding ABN Amro to Barclays would create Europe's second-biggest bank by market value, behind HSBC, and could prompt a wave of further consolidation in the region's fragmented sector.

ABN Amro is valued at €52 billion, while Barclays is worth £44.6 billion (€65 billion). Other European banks have approached ABN Amro, but those talks have also been low-key, according to sources.

ING of the Netherlands, Spain's Santander and Royal Bank of Scotland have all been keeping a close eye on the Dutch bank.

Takeover interest has been sparked by the attack on its management by the Children's Investment Fund (TCI), the activist hedge fund.

TCI, which has a 1 per cent stake in ABN Amro, is demanding a break-up or sale of the bank to boost returns for shareholders after almost seven years of poor performance. However, it is not clear if ABN Amro is ready to consider a sale.

TCI plans to put its demands to ABN Amro's annual meeting next month.

Prospective bidders are attracted to ABN Amro's subsidiaries in the US, Brazil, Italy and Asia. But a buyer would also have to take on ABN Amro's Dutch retail bank, which has struggled with slow growth and high costs, its underperforming wholesale banking division and a large and complex head office.

Barclays has a smaller geographical overlap with ABN Amro than some potential suitors, meaning a merger would produce fewer cost savings and be less attractive to investors. However, this may also help Barclays present itself to ABN Amro's management as a more friendly alternative.

Barclays and ABN Amro declined to comment. ABN Amro has retained four investment banks to examine its options and is expected to issue a formal response to TCI later this month. - ( Financial Times service)