In July the two firms confirmed they were in discussions about a possible merger that would have created a firm to rival market leader Icap.

But in a brief statement London-based Tullett Prebon says it has been "unable to reach agreement with GFI on satisfactory terms for a potential combination".

Accordingly, discussions between the two parties have ceased, says the statement.

US outfit GFI also released a statement saying it had terminated talks "because the two companies failed to reach acceptable economic terms for a transaction".

GFI and Tullett Prebon confirmed they were in the early stages of discussions over a possible deal on 31 July in response to press speculation. Previous talks between the two broke down last year after they were unable to reach agreement on a deal.