TT Group, a British-based specialist engineering company, has increased its stake in the engineering and technology group, Silvermines, raising the possibility that it may be interested in acquiring the Irish-registered company.

TT Group informed the Stock Exchange yesterday that it had raised its shareholding in Silvermines from 2.95 per cent to 5.79 per cent in recent days.

It purchased 1.1 million Silvermines shares or 1.2 per cent of the company on December 15th, raising its stake to 4.15 per cent. The following day, it purchased a further 1.5 million shares to take its stake to 5.79 per cent.

It was not clear at what price the shares were purchased but Silvermines stock closed in London at 39.5 pence sterling (44 pence) yesterday, a gain of 4p on the day. In Dublin, the shares were untraded at 40p. TT Group's shares closed 2p lower at 194.5 pence.

A spokesman for TT declined to comment on the reasons for the purchase or on whether it was a prelude to an outright bid for Silvermines. But he said TT, which had grown significantly in the last 10 years, had been a very active company, both in terms of acquiring stakes in other companies and in terms of acquisitions.

The Surrey-based firm, which has an industrial engineering and electronics business, reported pretax profits of £62.5 million sterling on turnover of £632 million last year. It employs around 6,000 people and has a full listing on the London Stock Exchange.

Silvermines, which is headed by Mr Clem Jansen, has four main divisions: aerospace, security, electrical, and broadcast and telecommunications.

It reported pre-tax profits of £5.6 million in 1997. The company was not available to comment on the TT stake.