Nasdaq is exploring a full merger with the London Stock Exchange and Deutsche Borse to create a global stock market spanning all the key time zones.

The move, announced yesterday, would give Nasdaq a decisive lead over the rival New York Stock Exchange.

It would combine three of the world's biggest stock markets by value, sharply intensifying the rush among the world's exchanges to co-operate. Unveiling more details of their proposed merger to create a combined Anglo/German equity market called iX, the LSE and Deutsche Borse said they would work with Nasdaq "to explore a full merger of interests to create a global exchange."

Mr Werner Seifert, chief executive of Deutsche Borse, said: "As a final objective a European goal is not far-reaching enough and that's why we are talking with Nasdaq."

Nasdaq is already a joint venture partner with iX in a new exchange aimed at European growth and technology stocks.

It would take over from the Neuer Markt, a similar exchange run by Deutsche Borse which has recently attracted a growing number of non-German listings.

IX said that it and Nasdaq would first take "substantial cross-shareholdings" in each other and that the growth market joint venture was an intermediate step.

Bankers expressed scepticism about a full merger of iX and Nasdaq, however. The US market, where technology heavyweights such as Microsoft are listed, remains mutually owned.

Its secondary market has been vulnerable to rival electronic trading systems, which are winning a growing share of US equity trading.

All three parties were keen to stress that any merger would take time to emerge, and was unlikely to happen for at least two years. There is also lingering scepticism about the iX proposal.

The LSE and Deutsche Borse yesterday issued a long-awaited information memorandum recommending that shareholders approve the merger, promising annual cost savings of £50 million ($75 million), more liquid equity markets and greater access for companies to new capital.

They also confirmed that iX would pay each of the LSE's 297 member firms about £30,000 each to offset the costs of connecting to Deutsche Borse technology, which will power the combined markets.

But critics said the memorandum failed to address key issues for market participants.