Royal Bank of Scotland has been stalking ABN for weeks

Although a decision on the offer will rest with ABN shareholders, the Dutch bank said the LaSalle bid was inferior to a rival one from Bank of America.

The move is a blow to Royal Bank of Scotland which is vying with Barclays to buy ABN Amro outright.

Barclays and ABN are planning a $91bn merger, but RBS hopes to trump this.

'Bid risks'

The consortium, which also includes Spain's Santander and Belgian-Dutch bank Fortis, has said it would be willing to offer $96.4bn for ABN Amro but this offer is conditional on it gaining control of LaSalle.

The takeover battle for the Netherlands' biggest bank has become mired in legal wrangling.

The considered view of the managing board is that the acquisition proposal for LaSalle did not constitute a superior proposal ABN Amro

A court in the Netherlands last week blocked ABN's plan to sell LaSalle to Bank of America for $21bn, potentially opening the way for RBS.

The sell-off of LaSalle is a key factor in ABN's planned merger with Barclays.

The RBS consortium, meanwhile, has said the acquisition of LaSalle is a key component of its overall offer for ABN.

The BBC's Business Editor Robert Peston said it would now be up to ABN's shareholders to decide which bid for LaSalle they favoured.

However, ABN said Royal Bank of Scotland's position that its bid for the entire company was conditional on the LaSalle deal going ahead was unacceptable.

"The considered view of the managing board is that the acquisition proposal for LaSalle did not constitute a superior proposal as a result of the uncertainty and execution risks," the Dutch bank said in a statement.

It added that it had not received any evidence of how the Royal Bank of Scotland group proposed to fund its proposed acquisition of ABN, despite repeated requests.

The rival LaSalle bids will now be decided upon by ABN shareholders at a forthcoming extraordinary general meeting.

In a statement, the Royal Bank of Scotland consortium said its offer for LaSalle was higher than its rival's.

"The banks considered their proposal to be superior under the terms of the contract between ABN Amro and Bank of America," it said.

Legal battle

ABN Amro's board backs a merger with Barclays bank

Last week's decision by a Dutch court that ABN could not go ahead with the sale of LaSalle to Bank of America without first putting the decision to a vote by shareholders threw the whole takeover battle into confusion.

Bank of America has said it plans to sue ABN as a result of the ruling.

The Royal Bank of Scotland consortium eventually plans to break up ABN if it wins control of the Dutch bank, while Barclays has pledged to shift the enlarged group's headquarters to Amsterdam if its bid is successful.