Deal mania seems to have hit the US telecoms sector

MCI said it would respond to the offer - which, if accepted, could derail its acceptance of Verizon's $6.75bn (�3.51bn) bid - by 28 March.

Verizon and Qwest are vying for control of MCI, the second-biggest long distance phone firm in the US.

Qwest said its bid values MCI at $26 per share, or $8.45bn.

MCI said that Qwest's offer was 3.735 Qwest shares for each MCI share and $10.50 in cash.

My guess is if MCI's board finds it (Qwest offer) attractive you'll see a counter bid from Verizon Tavis McCourt, Morgan Keenan Check the MCI share price Check the Qwest share price Check the Verizon share price

This is nearly 6% higher than its earlier, rejected, offer of $24.60 per share, Qwest said.

Richard Notebaert, head of Qwest, complained after the $6.75bn Verizon bid was chosen by MCI in preference to his earlier bid that he was then offering nearly a billion dollars more than the rival offer.

This is the second time Qwest has improved its offer for MCI in a bid to derail the offer from Verizon, which is the US's largest phone company.

Internet traffic

"My guess is if MCI's board finds it (Qwest offer) attractive you'll see a counter bid from Verizon with slightly more cash than their previous offer and Verizon will still end up with MCI," said Morgan Keegan analyst Tavis McCourt.

Ivan Seidenberg of Verizon has written to MCI

MCI was formed in 2002 from the rubble of WorldCom, after it filed for the largest bankruptcy in history following an $11bn accounting fraud.

It has its roots in long-distance services, and is regarded as valuable for its one million business customers, and its large network which also carries much of the world's internet traffic.

Phone company Verizon is a powerful player in north-east United States, and has a joint mobile venture with the UK's Vodafone. A deal with MCI would give it a wider national presence.

'Financial alchemy'

Qwest is the local phone carrier in the less-densely populated Rocky Mountains and north-west of the US.

On Wednesday, Verizon wrote to MCI calling into question Qwest's analysis of savings and growth from a potential Qwest-MCI combination.

"No wonder there appears to be a desperate quality to Qwest's efforts to acquire MCI," Verizon chief executive Ivan Seidenberg said in the letter.

"Qwest fails to explain the financial alchemy required to keep Qwest afloat, complete the acquisition of MCI, and invest in the business."