Gatwick operator BAA opened talks with two potential bidders last night as the prospect of a £10 billion takeover of the airport giant drew nearer.

BAA confirmed it was in discussions with a consortium led by Spanish infrastructure group Ferrovial as well as "another party", thought to be US-investment bank Goldman Sachs.

The talks mark a significant watershed in the takeover battle which began in February when Ferrovial made a surprise bid.

BAA accused Ferrovial of trying to buy it on the cheap but that stance appeared to soften yesterday amid speculation Ferrovial had raised its offer ahead of a Takeover Panel deadline.

Ferrovial had until midnight last night to make a final takeover offer after a previous proposal of 900p a share, worth £9.73 billion, was rejected by the BAA board last week.

Reports suggested it could increase its offer to at least 915p a share - equivalent to £9.89 billion. The second consortium led by Goldman Sachs has until noon on Friday to firm up its interest in BAA, with speculation suggesting it was prepared to make a £10 billion offer. It has boosted its firepower by adding Colonial First State Global Asset Management, owned by the Commonwealth Bank of Australia, to its bid team.

That would be closer to BAA's own expectations after the board told its shareholders that it believed the company was worth at least 940p a share.

Both bidders have said they would like to proceed with their offers with the support of the BAA board, although Ferrovial was accused of launching a "hostile" bid.

BAA said: "The board confirms it is holding discussions with the Ferrovial consortium and is also currently in talks with another party. The board of BAA advises shareholders to take no action and will update them in due course."

Ferrovial operates toll roads in Europe and owns infrastructure firm Amey in the UK.

BAA handles 63 per cent of all air passenger journeys starting and ending in the UK, including 92 per cent in the London area, where it operates Heathrow, Stansted and Gatwick airports, and 86 per cent in Scotland where it runs Glasgow, Aberdeen and Edinburgh airports.

The Civil Aviation Authority has said it would take a dim view of any takeover bid for BAA that used large amounts of debt.

The authority also stressed that it was not prepared to raise caps on airport charges, so denying a successful bidder the ability to generate cash to pay back loans used in a takeover.