The interest of Mr Green, one of Britain?s most successful private businessmen, turns up the heat on other potential bidders.

Wal-Mart, the US discount giant which owns Asda, J.

Sainsbury, Britain?s second-biggest supermarket group, and Kohlberg Kravis Roberts, the US buy-out specialist, are mulling a bid. Their declarations came in the wake of the agreed £2.54bn all-share offer for Safeway made by Wm Morrison Supermarkets.

Mr Green, who owns fashion retailers BHS and Arcadia, is today expected formally to announce that he is considering launching a bid for Safeway. He is said to have debt financing led by HBOS, the bank that backed his bid for Arcadia.

He has teamed up with Allan Leighton, former Asda chief executive, and may also work with Stuart Rose, who ran Arcadia until Mr Green bought it for £850m last year.

The men have asked Safeway to provide them with the financial information it has given to Morrison before they decide whether or not to bid.

People close to Mr Green said he would try to make a decision within a week to 10 days.

Mr Green and his team hope to win over investors who have only the Morrison bid on the table. They will offer cash under a deal they say will not be referred by the Office of Fair Trading to the Competition Commission as they plan to run Safeway with minimum store disposals.

Mr Green last night refused to comment. But people close to him said he was considering pitching any offer at about the level Morrison?s bid started before the slide in its share price. It valued Safeway at £2.9bn, or 277½p a share after the fall in Morrison?s share price it values the grocer at 241p.

Financial Times