Frankfurt is currently the largest stock market in the euro-zone. London remains Europe's largest market. The three stock exchanges said they would hold a news conference in London to present the plans in detail and explain the reasons for the merger.

According to published reports, Paris would be the centre for trade in blue-chip stocks, Amsterdam would handle futures and derivatives trading, and Brussels would become the hub for small and medium-sized companies. Belgian finance minister Didier Reynders, said on Monday, that he hoped the merger would quickly be expanded to include Madrid and Milan.

"The agreement has a goal of expanding past the three bourses," Reynders said. "A four-way bourse should be very quickly cemented due to the willingness of Luxembourg authorities to join the nucleus," he said.

"In a second stage, Spain and Italy could do the same. Euronext will be the second bourse market after London. But if Madrid is added, it will become the top rung among European markets," said Reynders.

Although each of the three bourses would have a trading speciality, Reynders said clients would trade off a single platform.

"The client will see the markets on a single Screen," said Reynders. "He will handle transactions on whatever market without having to know if its Paris, Brussels or Amsterdam which is in charge." The merger comes amid growing signs that a wider alliance of eight European bourses was failing.