The Government will unveil its blueprint for the future of Britain's supermarket sector today, when it gives its ruling on the four competing bids for Safeway, the country's fourth biggest grocer.
Patricia Hewitt, Secretary of State for Trade and Industry, will announce the outcome of a six-month competition inquiry into bids from Tesco, J Sainsbury, Asda and Wm Morrison at 11am this morning.
Morrisons, the Bradford-based supermarket group that kicked off the takeover frenzy with an agreed £2.9bn all-share offer for Safeway in January, is expected to be the only bidder given the all-clear to proceed with its offer.
An outright veto on all four bids is thought unlikely, given that the Competition Commission called an acquisition by the northern group "pro-competitive" in its June issues letter.
Tesco, Wal-Mart-owned Asda and J Sainsbury have all expressed interest in bidding, but the investigation is thought to have decided it would be against the consumer interest to allow any of them to swallow Safeway's 480 stores.
Some City analysts have suggested Asda may also be cleared because the overlap of its stores with Safeway's is relatively slim although a rival bidder said it would be perverse to block Tesco and Sainsbury's, the number one and three chains, but clear the number two.
Last night, Morrison was the bookmakers' favourite to receive the government green light, with spread-betting firm Cantor Index quoting odds of 7/4 on its bid succeeding.
Asda and Philip Green, the retail entrepreneur and BHS owner who was excluded from the lengthy competition investigation, were joint second favourites at 3/1.
All four industry rivals will be watching closely for the number of Safeway stores that any potential bidder will be forced to dispose of. Although Morrison has the smallest overlap with Safeway because of its northern bias, it is likely to have to sell at up to 50 stores, while Asda could be ordered to sell at least 100 stores.
Bob Stott, Morrison's managing director, last week ruled out any idea that the group might team up with Asda, saying: "We have no intention of making anybody else's bid successful."
Once bidders are cleared, they usually have 21 days under takeover rules to make an offer, but if conditions are attached the timetable may be relaxed. Either way, Safeway will have to endure months more of uncertainty about its future. Market share figures released earlier this week by Taylor Nelson Sofres showed that Safeway had held its own during the past 12 weeks, ceding just 0.5 percentage points of its share of the market.Reuse content