Rivals are awaiting news about who will be able to bid for Safeway

The Competition Commission has been considering which of four rival supermarket groups - Tesco, Asda, Sainsbury and Bradford-based William Morrison - should be allowed to bid for Safeway.

There has been widespread speculation that the watchdog will recommend that all bids except Morrisons' be blocked.

Supporters of the Morrisons bid say the company's store network, based predominantly in the north of England, would be a better fit with Safeway's business, which is particularly strong in southern England and Scotland.

Such a move would spark a major realignment in the UK supermarket sector, creating a fourth force capable of taking on the market leaders Tesco, Asda and Sainsbury.

However, newspaper reports over the weekend claimed Asda - owned by US retail giant Wal Mart - may be in with a chance after requesting a last-ditch meeting with the Commission to argue its case.

A fifth potential buyer, retail entrepreneur and boss of clothes retail group Arcadia Philip Green, was exempted from the Competition Commission's enquiry as he has no interests in the food sector.

Mr Green has expressed interest in Safeway, but has not yet tabled a formal offer.

City bookmakers are currently ranking William Morrison, Asda and Mr Green as joint favourites to clinch the deal.

The Competition Commission's report had been expected last week.

But the Department of Trade and Industry (DTI) extended the deadline by six days at the request of the Commission. The Commission must now hand over its report by midnight.

The government will examine the Commission's report, which will remain confidential, and will deliver a final verdict six weeks from now.