Invesco Perpetual, which owns 13.3 per cent of BAE Systems, has publicly voices concerns over the proposed _ 35 billion merger with EADS.

The fund management firm said, "Other than diversification - which investors can achieve for themselves more cheaply and simply - Invesco does not understand the strategic logic for the proposed combination."

EADS, which operates plane-maker Airbus, is planning to tie up with BAE Systems to create an industry leader that will surpass rival Boeing of the US. French firm, Lagardere owns 7.5 percent, French state owns 7.5 percent and German carmaker Daimler holds 15 percent stake in EADS.

Lagardere has been planning to sell its 7.5 percent stake in the company but it has not been able to do that the because of the requirement to maintain a balance between French and German among ownership of shareholders of EADS. Analysts have said that any deal between BAE and EADS will allow Lagardere to reduce its stake.

The head of EADS, Tom Enders said that the two companies are in `constructive and advanced' talks with governments. The two heads of the companies are aiming to scrap the equality ownership between France and Germany and create a normal functioning firm.

It is believed that the there will be an extension to the Wednesday deadline for the panel following the remarks by Invesco Perpetual.