Bradford supermarket chain Morrisons received a huge boost in its battle to take over Safeway today when its only serious rival pulled out of the running.

Retail entrepreneur Philip Green, the billionaire boss of Bhs, today announced he was no longer interested in mounting a bid for the firm.

Morrisons' other rivals, including Tesco, Asda and Sainsbury's, have already been excluded from the bid battle following a Competition Commission inquiry.

Mr Green said his bid team had undertaken "detailed analysis" of the Safeway business and held discussions with the Office of Fair Trading over the details of the Competition Commission inquiry.

In a brief statement from his bid vehicle Trackdean Investments, Mr Green said: "Following advice from its professional advisers, Trackdean has now decided not to proceed with an offer for Safeway."

Analysts said a Competition Commission ruling blocking Tesco, Sainsbury's and Asda from bidding for any Safeway stores in the near future was likely to have made a bid by Mr Green less attractive.

Henk Potts, of Barclays Stockbrokers, said: "It's likely he would have wanted to reduce some of the cost of taking over Safeway by selling off the unwanted stores to the likes of Tesco. The Competition Commission has effectively stopped him doing that - so taking away some of the economic benefit of the deal."

Morrisons is currently formulating a new bid for Safeway after being given the green light by competition chiefs. It is expected to be tabled around Christmas.

Meanwhile, the Office of Fair Trading may allow Morrisons to keep hold of between five and ten of the 53 Safeway stores it had been told it would have to sell by the Competition Commission, according to reports in the City.