A statement from IPC Advisors, a company controlled by Reichmann and charged with putting together a bid consortium, said "there can be no certainty" of an offer. The statement was at odds with a bullish assessment on Friday from Lord Bell, Reichmann's media spokesman, in which he said Reichmann believes his new consortium will be making the highest offer.

The latest statement said: "There can be no certainty that IPC Advisors will be successful in forming a consortium or in announcing an offer for Canary Wharf." It added that it had been "most encouraged" by the response of potential investors to forming a consortium.

The climbdown came after Canary Wharf announced a £1.1 billion ($1.9 billion) disposal that allowed it to recommend a bid from a rival consortium. The deal is one of the biggest investment deals ever to have been signed in the UK. The sale will allow Canary Wharf to cut debt, allowing Morgan Stanley to take on a group with lower gearing. It will also reduce the group's liquidation value from 299p to 261p per share, making it easier for the board to recommend the 265p offered by Morgan Stanley's consortium.

Prospects of a Reichmann counter-bid also faded after the company's independent directors backed the Morgan Stanley offer. But a bid from the Brascan consortium remains a possibility