Hopes of a bidding war for Cable & Wireless Worldwide faded yesterday after one of its two suitors unexpectedly withdrew from negotiations, reports the Times, London.

Tata Communications, part of the Indian Tata conglomerate, emerged last month as a rival bidder to Vodafone for the struggling fixed-line telecoms company.

Its interest helped to drive up the CWW share price to 37p, valuing it at just over 1 billion. Neither group lodged a formal bid in time to meet an initial deadline set by the Takeover Panel and both were granted extensions until 5pm today to lodge a formal offer.

Last night, however, Tata walked away after failing to agree a price with the CWW board. "[Tata] confirms that it has been unable to reach agreement with CWW on an offer price and therefore confirms that it does not intend to make an offer," it said. The company may rejoin the fray if Vodafone makes a formal offer.