Arriva, which runs the CrossCountry long distance intercity network, trains in Wales and has about one fifth of the London bus market, admitted five weeks ago that it was in discussions with the French state-controlled national rail network SNCF, the parent company of Keolis.

In a statement to the Stock Exchange today however, Arriva said: "Arriva confirms that exploratory preliminary discussions took place with Société Nationale des Chemins de fer Français (SNCF) regarding the possible contribution of all or part of the Keolis transport business into Arriva. No agreement was reached and all discussions have now ceased."

Arriva has expanded aggressively throughout Europe. The plan had been to merge those businesses with Keolis's regional trains and bus operations mainly in France where Arriva has no presence.

The talks had caused consternation among some of Arriva's rivals. Go-Ahead runs the Southern, Southeastern and London Midland train franchises in a joint ventire with Keolis called Govia. Keolis has a similar joint venture with FirstGroup to run the TransPennine Express in the north of England. If Keolis had merged with Arriva, that would have triggered change of control clauses on all the franchises affected, potentially leading to them being re-tendered by the Department for Transport.

The word in the City, however, is that bid chatter around Arriva is not going away. Arriva is said to be on the radar of Comfort Delgro, the Singaporean owner of Metroline buses in London. Deutsche Bahn may also be taking a look. The German railway group already owns the Chiltern Line commuter route between London and Birmingham and is looking at running trains through the Channel Tunnel to rival Eurostar.