A GROUP of investors backed by the City of Hamburg yesterday submitted what they said was a competitive bid for Germany's largest container shipping line, in an effort to prevent it falling into foreign hands.

The "Hamburg solution" group wants to ensure that Hapag-Lloyd, operator of the world's fifth-largest container shipping fleet, keeps its headquarters in the German city, Europe's second-busiest container port.

The group is likely to face stiff competition to buy the line, particularly from Singapore's Neptune Orient Lines.

Neptune Orient has long been the frontrunner to buy Hapag-Lloyd and people involved have indicated that it had also submitted a bid.

Hapag-Lloyd's present owner, the Hanover-based tourism and shipping group TUI, has sought bids for the line as part of a strategic review of its position within the group.

Yesterday was the deadline for preliminary bids.

An acquisition of Hapag-Lloyd would allow Neptune Orient to gain the size advantages it lacks as operator of only the world's eighth-largest container shipping line.

TUI agreed to the strategic review under pressure from John Fredriksen, the Norwegian shipowner who this year emerged as the group's largest shareholder.

Mr Fredriksen wants Hapag-Lloyd spun off as a separate listed company, rather than sold directly, so that shareholders will receive cash from any sale of the company directly.

However, TUI's strategy looks more likely to succeed after Alexey Mordashov, a Russian metals tycoon who supports the board's strategy, yesterday announced that his stake now matched the 15 per cent held by Mr Fredriksen.

The "Hamburg solution" bid has been co-ordinated by Wolfgang Peiner, a former state senator for finance in the Hamburg state government, and Christian Olearius, a businessman who chairs the executive board of MM Warburg, a Hamburg-based private bank.