Supermarket target Safeway's six-way take-over tussle took another twist when it dropped its recommendation of the original offer from Morrisons.

The UK's fourth largest supermarket chain instead told shareholders to await developments so it could review the other interest.

But Safeway said it was still supportive of the Morrisons' offer, which was tabled two weeks ago and valued the chain at £2.9 billion.

Since then, there has been interest from Sainsbury's, Asda owner Wal-Mart, Tesco, Bhs billionaire Philip Green and US buyout giant Kohlberg Kravis Roberts.

Reports also suggested Marks & Spencer (M&S) had run the rule over Safeway, although M&S declined to comment on the speculation.

One of the key factors to be considered by the Safeway board and its advisers will be which of the proposed bids would fall foul of regulatory concerns.

In today's statement it said it remained confident a merger with Morrisons would avoid reference to the Competition Commission and noted the Bradford-based retailer had so far made the only firm bid.

Safeway chairman David Webster said: "In the light of the announcement of potential competing offers, we are advising shareholders to await developments."

Morrisons chairman Sir Ken Morrison acknowledged the extraordinary number of bids had put Safeway in a difficult position.

He said: "They have kept us fully informed of their deliberations and we understand why they have made this statement."

The decision to pull its recommendation also comes with Morrisons' all-share offer now worth just £2.5 billion, following a fall in its share price.

Safeway is currently valued at £3.4 billion after its shares surged on the back of the takeover speculation.

The battle for Safeway took a surprise turn on Wednesday when Tesco defied forecasts to throw its hat into the takeover ring.

Most commentators had expected the UK's leading chain to stay out of the contest.