Norah Jones' album has been a highlight for EMI

The British group, which faces competition from German rival BMG, is planning a takeover bid worth �920m.

If a deal is reached it would create the world's second largest music group, with a market share of about 24%, behind France's Universal Music.

Three years ago, a previous attempt by EMI to merge with Warner Music, which is part of media giant AOL Time Warner, was ditched amid regulatory concerns from Europe.

Shares slip

Any new offer is likely to take a few weeks to materialise.

It is likely to be mainly cash, with the remainder financed by issuing shares to Time Warner.

"Discussions are at a very preliminary stage and there is no assurance that they will result in an agreement acceptable to both parties," an EMI spokesman told Reuters.

EMI shares have bounced back from a low of 78p in March to stand at nearly 160p, but they fell 1.4% on news the company has returned to the negotiating table.

AOL Time Warner has decided to explore a bid from EMI after struggling to wrap up a deal with BMG, although talks with the German company are understood to be continuing.

EMI's roster of artists includes Robbie Williams, Radiohead and Norah Jones.