The Virgin board said it was unanimous in its decision, despite majority shareholder Sir Richard Branson (who owns 72 per cent of the company) being keen to press ahead with the deal.
The board, which must act in the interests of all shareholders, are engaged in an act of brinkmanship to secure a higher price for the shares.
Independent shareholders, which include City institutions, are thought to be in favour of the deal in principle.
The Daily Telegraph reports that they are understood to be holding out for a takeover that would value the company at £903million.
If the deal went ahead, NTL would be re-branded Virgin in a media and communications group boasting 9 million direct customers, 1.5 million more than BSkyB.
The new group would also have 2.5 million broadband customers, 4.3 million fixed-line telephony accounts and more than 5 million mobile phone customers.
It would be a major competitor to BSkyB in the pay-TV market, with ability to offer ‘quadruple play’ services – mobile, fixed-line phone, TV and broadband. BSkyB, following its recent £211million takeover of Easynet, can only offer triple play services of fixed line, broadband and pay-TV.
The new organisation would be looking to compete with Sky for Premier League rights that come up for renewal next year.
