SUPERMARKET group Morrisons was last night preparing to bid for Safeway after the planned takeover of its rival received government clearance.

The chain, which is based in Bradford, has 21 days to table a formal offer for Safeway after Trade and Industry Secretary Patricia Hewitt accepted undertakings from Morrisons that it would sell 53 stores to meet competition concerns, bringing to an end an 11-month takeover battle.

It was revealed last month that supermarket rivals Sainsburys, Tesco and Asda, were preparing to buy Safeway stores when Morrisons sells them off, if the takeover is successful.

Morrisons is now the sole candidate for the takeover bid after its three main rivals failed to pass the competition inquiry, and retail enterpreneur Philip Green dropped out.

Attention will focus on whether Morrisons intends to alter the original £2.9bn offer made at the start of the takeover battle in January.

That bid lapsed after its three rivals and Philip Green expressed an interest.

As part of the Competition Commission inquiry, the three supermarket chains agreed they would only acquire the 53 stores being off-loaded by Morrisons.

Mrs Hewitt said: "The Office of Fair Trading has advised me that they have obtained the undertakings which I have asked them to seek from Asda, Morrisons, Sainsbury's and Tesco.

"I believe they satisfactorily address the concerns identified by the Competition Commission in its report."

The announcement from Mrs Hewitt was welcomed by Safeway.

It said: "This brings to a close the regulatory process which began almost a year ago and starts the period during which Morrisons will be able to put a proposal to the board of Safeway."

The Competition Commission has already mapped out which stores Morrisons must sell as part of any merger agreement.

Safeway said last month it had received indicative offers for 39 stores comfortably in excess of its valuation of £543m.