SUPERMARKET chain Wm Morrison could put in a bid for rival Safeway in a matter of weeks.

Competition authorities have set out conditions for the takeover, which could see Morrison's make an offer before Christmas.

The Office of Fair Trading (OFT) has sent Morrison a fresh set of undertakings, which it will have to sign for the deal to go ahead.

It is believed that the chain could reach an agreement with the OFT by next week.

Once Sir Ken Morrison signs, he will have three weeks in which to table a bid.

The OFT has been negotiating with the two parties for the past eight weeks, following bids from Tesco, Sainsbury's and Asda being blocked by the Competition Commission.

But the big three supermarket chains will be entitled to make offers for up to 53 Safeways stores, after the Competition Commission ruled there cannot be a Morrison and Safeway store within a ten to 15-minute car journey of each other.

This includes six stores in the Tees Valley - two in Darlington, plus stores in Guisborough, Loftus and Redcar, all east Cleveland, Ingleby Barwick, near Stockton, and Coulby Newham, in Middlesbrough.

Safeway has said the sites have attracted strong interest.

It said it had received indicative offers for 39 stores in excess of its own valuation of £543m.

It said there had also been considerable interest in another 13 outlets valued at £31m.

The successful purchase of Safeway will end a year-long battle between the four major supermarkets and Phil Green, owner of Bhs and fashion chain Arcadia.

The way was cleared for Morrison's after Mr Green pulled out of the takeover battle last month.