Jul. 23--Bus and rail operator FirstGroup has shelved its pursuit of rival National Express for the moment, after it was pressed to "put up or shut up" by the Takeover Panel.

First (up 2 1/2p at 344 3/4p) made a preliminary approach to NatEx last month, but the merger plan was rejected.

However, industry sources said it is unlikely to be the end of First's interest.

Debt laden NatEx (down 1p at 310 1/4p) was recently stripped of its loss-making London-to-Edinburgh east coast rail franchise by the Department for Transport, which has also indicated a desire to take the firm's two other rail contracts from it.

NatEx, which is currently without a chief executive after former boss Richard Bowker jumped ship on the day it lost the east coast franchise, previously warned it may have to sell assets or tap investors for cash to pay down its borrowings.

In a statement, First said: "FirstGroup has considered its position in light of these uncertainties and now believes it would be inappropriate to consider a formal offer at this time."

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