Instagram 'called off deal with Twitter before Facebook sale'

Instagram, the photo-sharing website and app, could have been owned by Twitter rather than Facebook.

It emerged that Instagram chief executive, Kevin Systrom, verbally agreed to sell to Twitter for $525m (£325m) in March but then called off the deal.

Just weeks later, Mr Systrom ended up selling to Facebook in a $1bn deal.

During negotiations with Instagram, Twitter executives gave Mr Systrom a "term sheet", giving details of the proposed deal, according to the New York Times.

But Mr Systrom later told regulators in California under oath that his company had not received any "formal offers or term sheets" from potential buyers apart from Facebook.

The revelation that Instagram and Twitter both held talks is significant because relations between the two have soured since the acquisition.