The London Stock Exchange
The newspaper said that detailed discussions on a nil-premium merger deal had taken place between Paris-based Euronext's financial adviser Morgan Stanley and Merrill Lynch, which represents the LSE.
The plans could be put before Euronext's shareholders at its annual shareholders meeting on May 23, the paper said without revealing the source of its information.
It also quoted unnamed sources as saying that in the event of a merger with Euronext, the LSE would be valued at about 12 pounds a share and its Chief Executive Clara Furse would be offered the opportunity to continue to run the LSE from its British base.
The LSE, whose shares closed Friday at 1,036-1/2 pence, last month fought off a takeover approach from Nasdaq Stock Market Inc.
Officials at LSE and Euronext were not immediately available for comment.