Icap is set to square up to the London Stock Exchange, its one-time merger suitor, over European fixed income trading platform MTS in a move that will also pit the UK interdealer broker's regular banking advisers against each other.

Icap, run by chief executive Michael Spencer, has called in Lexicon Partners, the UK corporate finance boutique that handled its record takeover of US currency and commodity group EBS last year, to work on a possible bid for MTS.