The portfolio includes the UK's tallest building

The group said in a statement that it had "made an approach to Canary Wharf Group concerning a possible offer for the company" on behalf of the Morgan Stanley Real Estate Fund.

Canary Wharf, which owns most of London's second financial district, saw its shares shoot up almost 50% on Friday after it had been approached by several interested buyers.

Shares rose 5% to 276p during early trading on Monday on news of Morgan Stanley's interest.

The news has given a boost to Canary Wharf's shareholders, who had feared that the slowing economy might cause the firm to collapse.

Canary Wharf shares, which had been above �5 three years ago, have traded as low as one-fifth that level this year.

Canary Wharf, one of the country's best-known property firms, has had a turbulent history.

Having been launched amid the stock market boom of the late 1980s, it went spectacularly bust in the recession of 1992.

Demand for office space in London, especially among the City's financial clients it was seeking, was extremely weak during the first half of the 1990s.

Office oversupply

But the late 1990s saw a remarkable resurgence in Canary Wharf's fortunes, mainly thanks to the rapid improvement in Docklands infrastructure, and the arrival of some high-profile new tenants - notably many former Fleet Street newspapers.

More recently, however, the attack on the World Trade Center has made skyscrapers less popular; there is also a sudden oversupply of cheap office space in London, and financial services companies are feeling the pinch once again.

Infrastructure has improved hugely in recent years

Canary Wharf's shares have fallen particularly sharply over the past six months, amid widespread market rumours that the firm was on the verge of insolvency.

Other names mentioned by analysts as potential bidders are British property giant Land Securities and Brascan, a Canadian firm that is among the biggest landlords in Manhattan.

Brascan acquired a small stake in Canary Wharf earlier this year.