GERMAN Bank WestLB has withdrawn its support for a potential bid for water group AWG after four months of takeover wrangling.

WestLB, which was acting on behalf of consortium Bream Investments, first approached AWG, parent company of Hartlepool Water, in January, with an informal offer valuing the company at 510p per share - or £905m - which was rejected.

After a second approach, valuing the company at 545p per share - or £967m - was rejected, the Takeover Panel imposed a deadline of Wednesday for WestLB to come up with a formal offer.

Last week, AWG chairman Peter Hickson also called on WestLB to make its intentions clear.

WestLB, whose principal finance arm is led by deal-maker Robin Saunders, has now said that it will not be backing any bid by Bream ahead of the panel's deadline.

Bream said it was in active discussions with other potential backers and that it would update the market on or before Wednesday.