The Australian Prime Minister John Howard has categorically said that the government would not take any action to block a possible Qantas takeover deal as long as it meets the foreign investment laws.

This came after Macquarie Bank and Texas Pacific approached Qantas about a potential takeover deal. Market sources say that a deal of this size could be worth as much as 10.3bn Australian dollars.

Qantas chief executive Geoff Dixon said that the talks are in very early stages and there is little they can say about it.

Prime Minister Howard said in a statement: “We won’t be changing the foreign investment rules. Nor will we be altering the caps on individual shareholdings.” He further said that under the current laws in the country, there was no means to prevent the company being broken up.

He further said: “We can’t preach the philosophy of the free market and every time something arises which might look a bit uncomfortable, dart around and say we’re going to pass a new law to stop it happening. You can’t run a country like that and we don’t intend to do that.”