Tesco said it may suspend Merrill Lynch as its broker if if the investment bank assists retailing entrepreneur Philip Green on his possible cash offer for Safeway.

The supermarket giant said that if Green launches a bid for Safeway, Tesco might respond by suspending Merrill Lynch as its broker for the duration of the bid or possibly drop it altogether.

A Tesco spokesman told the Daily Telegraph that although there was “no change to our brokers at present - It will depend what happens”.

He added that if Philip Green makes an offer Tesco would have to review the situation.