A group of the world's biggest investment banks will today unveil plans to build a platform for trading shares of Europe's biggest companies and go head-to-head in competition with the region's stock exchanges.

The group, comprising Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS, will be shareholders in a new company with its own board and executives.

The banks, which account for roughly half of all trading in European equities, will announce that they plan a high-speed trading system with trading tariffs far below those of the London Stock Exchange, Euronext and Deutsche Börse.

The platform is intended to take advantage of new European rules that take effect next November and which are aimed at promoting competition and reducing the exchanges' powers.

The gambit comes as Deutsche Börse is preparing to withdraw its bid to merge with Euronext in a move that could clear the way for NYSE Group's agreed bid for the Paris-based stock exchange.

People close to the Frankfurt exchange said Deutsche Börse and its advisers at Deutsche Bank were working on a plan to withdraw its offer, which is worth much less than the US offer.

The German exchange's strategic committee this week discussed "several options", whereas in previous meetings it has focused on the Euronext offer, according to a person with knowledge of the meeting.

Deutsche Börse said yesterday "our offer stands and is still valid" and declined to comment further. Shares in Deutsche Börse fell 1.8 per cent to €131 in Frankfurt and Euronext ended 3.8 per cent lower at €89.80 in Paris.

A Deutsche Börse source said the company would hold a news conference today.

A Börse withdrawal from the bid battle could derail plans for a pan-European securities trading group which have been cherished by many in Europe's financial industry, as well as by senior monetary policy makers and politicians.