The buyback was a part of M&S' defence against Philip Green

The retailer is buying back 27.9% of its shares at 362p each, in a move that will see �2.3bn ($4.2bn) in cash returned to shareholders.

M&S said the scheme, which was approved on Friday, was over-subscribed.

The buyback programme was designed to give investors an incentive not to back a takeover attempt from Philip Green.

Mr Green, owner of Bhs and the Top Shop to Dorothy Perkins Arcadia group, launched an unsuccessful hostile takeover bid for M&S this summer.

Not mandatory

M&S's share buyback price of 362p represents a premium over Friday's closing price of 357p, but it falls short of the 400p per share offered by Mr Green.

I think that this expresses a certain degree of confidence in what Rose is doing Rebecca McClellan, Exane M&S's share price

The programme is not compulsory, and investors who do not sell will be left with a larger share of the firm, as after its completion there will be fewer shares in existence than before.

An M&S spokesman said it was too early to say how the buyback would affect the balance of power between institutions and its army of private shareholders.

Mr Green blamed the failure of his takeover bid on opposition from private investors, who held 20% of M&S shares prior to the stock repurchase scheme.

Market approval

The share buyback programme formed a central plank of M&S' defence against Mr Green's approach.

Under stock market rules, Mr Green is now barred from launching a fresh bid until February.

Funds for the buyback were raised from the sale of financial services arm M&S Money to High Street bank HSBC.

Analysts said the fact that the buyback scheme was already over-subscribed was a good sign for M&S and its chief executive Stuart Rose.

"I think that this expresses a certain degree of confidence in what Rose is doing," said Rebecca McClellan, analyst at brokers Exane in London.

M&S shares finished the day up 1.5p, or 0.4%, at 358.5p.