The UK’s competition body has given Euronext and Deutsche Boerse the chance to bid for the London Stock Exchange, provided certain conditions are met.

The Competition Commission said today the two must ensure the independence of the LSE’s clearing services, LCH.Clearnet.

Pan-European bourse Euronext could now move towards formalizing a bid and agreeing a price with the LSE.

Meanwhile, Germany’s Deutsche Boerse may revive its bid. It dropped plans for a £1.3 billion offer in March.

However, Deutsche Boerse refused to comment on whether it would resurrect its bid following the release of the watchdog’s report on Tuesday.

Either merger would make it more difficult for other exchanges to compete with LSE in trading UK equities

The Commission made its ruling following a seven-month investigation into takeover offers for the London exchange.

Its findings repeated concerns it voiced in a preliminary report in July, which stated a takeover by either firm would “substantially lessen competition”.

“Either merger would make it more difficult for other exchanges to compete with LSE in trading UK equities due to both bidders direct control or influence over the provision of clearing services,” it added.

In order to reduce such worries the Commission set out a number of hurdles prospective bidders must clear.

Euronext was told it would have to substantially slash its stake in Clearnet – from 41.4% to below 15% – and limit its representation on Clearnet’s board to just one seat.

Meanwhile, Deutsche Boerse would face similar constraints if it decided to make its own clearing provider, Eurex Clearing, the main provider for the LSE.

Both bidders were also warned not to obstruct access to the LSE’s clearance provider by any competitor.