The London and Frankfurt stock exchanges have already taken the first steps towards the creation of a single European stock market which could one day rival Wall Street.

Last July, the two bourses surprised the financial markets when they announced a link-up to coincide with the introduction of the single currency in January and which would eventually lead to a common platform designed to trade the top 300 European stocks.

"Through this plan, starting with combining the trading of leading German and UK stocks, we aim to create the nucleus of a single European stock market which will ultimately be based on a common electronic trading platform," the two exchanges said.

Since then a number of other European stock exchanges, including Amsterdam, Brussels, Madrid and Milan, have expressed an interest in establishing links with the Anglo-German alliance.

The Irish Stock Exchange is understood to be keeping an open mind on the alliance. Market sources say it is likely to see how the alliance develops and the reaction of the investment community before making up its mind about where its future lies in a pan-European market.

In the meantime, it is expected to forge a link with the Paris bourse sometime next year by buying the French stock exchange's electronic trading system.

This is already used by a number of bourses around the world, including the Chicago Board of Trade (CBOT) and the Brussels, Lisbon and Warsaw bourses.

However, market sources say the link-up with Paris, which did not hide its displeasure at being bypassed by Frankfurt and London earlier this year, would not preclude Dublin from establishing links with the Anglo-German alliance at a later date if it chose to go down that route.