The Financial Services Authority (FSA) yesterday ruled Stuart Rose out of its investigation into trading in the shares and derivatives of Marks & Spencer ahead of the takeover bid from Philip Green.
The news gave Mr Rose, the M&S chief executive, an important boost before Monday's crucial trading update. Also out of the FSA inquiry is Michael Spencer, the chief executive of Icap, the money brokers.
In a statement, the FSA said: "On the basis of the facts the FSA has established, there are no ongoing inquiries in respect of Mr Stuart Rose."
Free of the FSA's investigation, Mr Rose will now embark on a major charm offensive starting with Monday's presentation followed by one-to-one meetings with shareholders throughout next week.
Mr Rose intends to prove to shareholders that the company is worth significantly more than Mr Green's proposed 400p-a-share bid, which M&S rebuffed yesterday. The retailer cited the significant risk of any bid from Mr Green being referred to the competition authorities as well as claiming the revised offer still undervalued the business.
Last night Mr Green continued to pile the pressure on Mr Rose. "If he doesn't get an Oscar on Monday then he's got problems. If he does we'll go home. The answer is, as of today, we're still there. The money is there and we've got to 6 August. After Monday the shareholders will have to decide."
Mr Rose, it emerged yesterday, has been granted options worth £3.4m, or four times his basic salary, with a so-far undetermined strike price. He is already receiving a £1.25m signing-on fee and if Mr Green's bid is successful he will receive a £2.1m pay off.
Mr Green said the options should have a strike price of 400p, the level that the M&S board has said undervalues the company. Mr Green's bid is now thought to have the conditional support of about 20 per cent of M&S shareholders.
So far two shareholders Brandes Investment Partners and Schroders Investment Management, which together have about 13 per cent have said they would sell to Mr Green but only if the M&S board gave them the green light with a recommendation. More shareholders came on board yesterday, according to fund managers.
M&S said it would not recommend Mr Green's proposal, insisting it would prove on Monday that such an offer "significantly" undervalued the business and its prospects. It said there were competition issues with Mr Green's bid as well as uncertainty over the ownership structure of Revival Acquisitions, Mr Green's bidding vehicle. M&S also said Revival should clarify the extent of its proposed due diligence.
Revival hit back saying it was "puzzled why the board of M&S has questioned certain aspects of Revival's proposal only after not recommending it".
It said it was surprised M&S had not sought the clarifications it needed before it arrived at its decision.
"Revival has received no contact at all from either the board of M&S or its advisers regarding any aspects of the proposal that it made yesterday," it said.
The key battle ground is now likely to be fought over the views of the main long-term investing institutions, many of which are based in London.