The London Stock Exchange faces potential isolation after Euronext threw its weight behind a proposal to expand its merger with the New York Stock Exchange to include the equity trading businesses of its counterparts in Germany and Italy.

In a statement Euronext said that it welcomed the suggestion of a "European solution" put forward last week in a report commissioned by the French lobby group Paris Europlace. The report suggested the addition to the proposed Euronext NYSE deal of the cash equity businesses of Deutsche Börse and Borsa Italiana.