Elf Aquitaine is biding its time before striking back against a hostile bid by the other leading French oil group, TotalFina, Elf president, Mr Philippe Jaffre, told senior managers yesterday, sources close to the company said. Mr Jaffre told 450 managers meeting at Elf headquarters that the group had kept silent since the bid was launched on Monday and that this silence "precedes an initiative".

He was reported to have said: "This initiative is going to be based on a big project in which Elf and its teams will be masters of their destiny. We have the capacity to ensure that we are treated with respect."

On Monday, TotalFina offered four of its shares for three Elf shares, representing a premium of 15 per cent on the last quoted price and valuing Elf at 42 billion euros to form a French giant and the fourth-biggest oil group in the world. The French government has indicated that it will not block the bid, even though it will cost 2,000 jobs in France and 2,000 in the rest of the world, arguing that the resulting entity would be French and capable of resisting takeover by a British or US oil giant.