Two major Anglo American shareholders have backed new Chairman John Parker's bid to buy time and stave off rival Xstrata's nil-premium merger proposal, which one said on Tuesday was effectively dead.

Parker has met Anglo's large UK shareholders over the past fortnight, seeking time for Chief Executive Cynthia Carroll to deliver on planned cost savings, the two investors told Reuters.

One large Anglo shareholder, a fund manager who spoke on Tuesday on the condition of anonymity, said after meeting with both sides he doubted a deal would emerge.

There's not a chance for the deal going ahead in the next twelve months, in my view. It is effectively dead, he said.

The fund manager, a top ten shareholder in Xstrata, added: Because (Parker) has got enough credibility to support Cynthia at least in the near term, it's all over.

Another investor, a top ten holder of Anglo and Xstrata, said some cross-investors favored the tie-up, but not enough Anglo shareholders had backed it. It's pretty clear to us the deal is not going to happen, he said late on Monday.

The investors were divided on whether Anglo might seek a put up or shut up ruling from the UK Takeover Panel, forcing its suitor to bid or walk away for six months. Speculation in July had it that such a ruling was near.

Anglo has said Xstrata's nil-premium proposal does not make sense, partly due to what it regards as its own superior mining assets with longer lives. Many shareholders have said Xstrata must offer a premium.

Xstrata Chief Executive Mick Davis told Reuters earlier this month the group was quite patient and could wait to engage with Anglo. He did not believe the deal merited a premium.

Anglo declined to comment. Xstrata had no immediate comment.

(Additional reporting by Julie Crust)