TAKEOVER target Safeway is keeping the two remaining bidders waiting in the hope of forcing the sale price higher.

An open field was narrowed down to Bradford rival Wm Morrison and retail entrepreneur Philip Green by the Competition Commission's ruling that offers from other interested parties were anti-competitive.

It is understood that most people at Safeway want a straight buyout by Morrisons to create a fourth power in the supermarket industry.

But the group is believed to be keeping Green interested to protect the interests of its shareholders by forcing a better price from Morrisons.

Attention is with Morrisons at the moment, as the company tries to persuade the commission to reduce the number of stores it would have to off-load were it successful in a bid for Safeway.

Those discussions are expected to conclude next week.

In the meantime, Morrisons and Safeway have been working to find potential buyers for the outlets.

At some stage during the coming few weeks, the Bradford group will be expected to make a new offer, its original bid lapsing during the protracted deliberations by the commission on who would be allowed to buy Safeway.

Any offer will be set against the backdrop of a trading statement by Safeway yesterday announcing a stable performance in the face of uncertainty over its future.

Anthony Platts, retail expert at North-East stockbrokers Wise Speke, said: "Safeway's actions, including announcing stronger than expected trading, are interpreted as inviting Morrison to increase its previous offer when it re-bids and to possibly include a cash sweetener on top of an all-share bid."

Safeway's sales were up by 0.7 per cent on a like-for-like basis in the 16 weeks to October 11, after slipping 0.6 per cent in the previous three months.

Safeway predicted that first-half underlying profits would fall from £187m last year to about £173m this time - a figure which also takes account of higher pension charges.

Meanwhile, it has continued to build its portfolio, opening two stores.