Philip Green's decision to pull out of the bidding for Safeway has left Morrisons with a clear run at the store group it first approached in January.

Retail analyst Anthony Platts, assistant director in the Teesside office of stockbrokers Wise Speke, said: "It is clear that Safeway's move in attempting to value the stores set aside for disposal was intended to force Philip Green to show his hand. It was not in Green's interest for these stores to be given an up-to-date value, let alone be sold off so quickly.

"Morrisons now has a clear run once the issue of store disposals has been resolved.

"Morrisons is now in a very strong position and it makes sense for group executive chairman Ken Morrison to stick to his guns and not change the terms of the original £2.9bn all-share offer.

"As a Yorkshireman, he knows a bargain when he sees one.

"The fact that the share prices of both Morrisons and Safeway are unchanged on the news of Green pulling out would back up the thought of an unchanged bid. There is a very slim chance that a Continental food retailer, such as Ahold, could enter the frame and mount a bid, but all bets are sticking with Morrisons."