"London Stock Exchange Group is pleased to confirm that it has entered into exclusive discussions with LCH.Clearnet regarding a potential transaction," the LSE said in a statement.

"Work is focused and ongoing, with a view to moving towards an agreement, though at this stage there can be no certainty that any transaction will result," it said in a statement which gave no further details.

The news comes one day after London-based financial information services firm Markit said it would not proceed with a rival bid for LCH.Clearnet, clearing the way for a takeover by LSE, which runs the London and Milan stock exchanges.

According to the Financial Times, the LSE plans to win control of LCH.Clearnet by purchasing 51 percent of the clearing house.

Its offer would value the whole of LCH.Clearnet at about 1.0 billion euros ($1.36 billion), the newspaper added.

Clearing houses play a key role in the transaction of shares between two parties, charging clients a fee to guarantee deals should one side default.

A successful takeover of LCH.Clearnet would meanwhile mark a major victory for the LSE's French chief executive, Xavier Rolet, who earlier this year failed to merge the London Stock Exchange with the Toronto Stock Exchange.

Copyright AFP (Agence France-Presse), 2011