CNOOC's $18.5 billion bid for Unocal, the US energy group, lacked vital government approval, it emerged yesterday.

The lack of official support contributed to the collapse this week of the Chinese group's daring takeover attempt.

The disclosure of the part played by Beijing in CNOOC's withdrawal - which enabled Chevron to win Unocal for $17.6 billion - will heighten concerns over the ability of Chinese firms to clinch big takeovers.

People close to the situation said the Chinese authorities steered clear of the Unocal takeover battle, despite protests from US politicians that the state-controlled group's bid was sponsored by Beijing.

Diplomatic contact between Beijing and Washington might have helped CNOOC weather political opposition on Capitol Hill or at least given the Chinese group confidence a takeover would not be blocked on national security grounds, according to people familiar with the matter.

But "the Chinese government was never behind it", said one.

As a Hong Kong-listed state company, CNOOC did not need Beijing's permission for an overseas takeover bid. But it is understood the company contacted top officials in the relevant state organisations before launching its $67-a-share bid on June 23rd.

"CNOOC asked all the relevant authorities . . . No one said 'go ahead' but nobody said 'don't go' either . . . So CNOOC went ahead with no explicit help from Beijing," said a person close to the situation.

The partial media blackout coincided with the failure by Fu Chengyu, CNOOC's chairman and chief executive, to raise his bid and deliver a knockout blow to Chevron. Mr Fu's move perplexed observers, giving rise to speculation Beijing may have asked him to withdraw.

The Chinese government might have wanted to prevent anything overshadowing next month's Washington visit by Hu Jintao, the Chinese president. A person close to the bid said: "The political opposition in the US had a chilling effect on Beijing." - (Financial Times Service)