The value of takeovers of British firms made by foreign companies picked up sharply in the first three months of this year to its highest for nearly six years.

The Office for National Statistics yesterday said spending by foreign companies on acquisitions in Britain soared to £19.4 billion from £15.5 billion in October-December last year.

That was the highest since the third quarter of 2000, when spending on such deals was £38.2 billion.

The ONS cited Telefonica's purchase of O2 for a reported value of £17.7 billion as a significant transaction during the past quarter.

The actual number of deals fell to 34 from 59, the lowest since the fourth quarter of 2003.

However, recent company announcements suggest no slackening of foreign interest in UK firms.

Low interest rates and stable equity markets have fuelled a rise in company takeovers across the world.

Airports group BAA has rejected a £9.4 billion takeover proposal from a consortium led by US investment bank Goldman Sachs, and is also being pursued by Spanish construction firm Ferrovial.

The London Stock Exchange, meantime, is being wooed by US rivals the Nasdaq stock market and the New York Stock Exchange.