In the end, even WorldCom's willingness to shed large parts of Sprint was not enough to erase the US Department of Justice's concern about the potentially anti-competitive effects of their merger.

But while attempting to block one merger, US regulators may have opened the door to a new rush of deals in the US telecoms industry.

Mr Joel Klein, head of the department's antitrust division, based his opposition to the $115 billion (€159 billion) deal squarely on the overlap of the two companies' businesses in the long-distance market.

That stance against more "horizontal" consolidation tacitly leaves open the possibility of more "vertical" deals between companies whose roots are in different parts of the telecoms business.

With barriers between local and long-distance companies beginning to crumble, and wireless assuming much greater prominence, there is plenty of scope for more deals.

Attempts by foreign carriers to break into the US, led by Deutsche Telekom, will only add to the pressure for more combinations.

And with their own merger now facing almost certain death, Wall Street expects WorldCom and Sprint to be among the first to return to the deal-making.

Sprint is seen as the most likely target of an early takeover approach. Mr Bill Esry, Sprint chairman, rejected Deutsche Telekom's overtures last year before opting for a deal with WorldCom. He also turned his back on a rival offer from local carrier BellSouth - even though, according to some people close to the Baby Bell, it might have been prepared to pay more than WorldCom.

Both companies, along with others, may well now return to the fray.

Mr Dan Reingold, telecoms analyst at Credit Suisse First Boston, has reiterated his view that Sprint's shares were a "strong buy". "If the WorldCom deal is abandoned, it is likely to receive offers from several companies, including Deutsche Telekom, Qwest and BellSouth," he said.

Based on a sum-of-the-parts valuation, Sprint could be worth $79 a share, close to the $76 that WorldCom agreed to pay, according to Mr Reingold.

For a foreign company looking to break into the US, Sprint is not the only operator with a national network that could come up for sale. Qwest, Global Crossing and WorldCom itself are also potential takeover candidates.

However, Sprint has two particular appeals, according to analysts. One is its established business with large US companies. While newer operators such as Qwest have made inroads into the long-distance voice and data market, much of the traffic they carry is for other telecoms carriers. They are still in the early stages of assembling a broad base of large corporate customers.

A second attraction is the wireless unit, Sprint PCS, which is now more valuable than the rest of the company's operations put together and was the main focus of WorldCom's interest.

A buyer of Sprint would be in the curious position of, in effect, controlling Sprint PCS but not sharing in any of its profits; the unit is covered by a tracking stock that leaves the economic interest in the business with holders of a separate class of shares.

Like WorldCom, however, any other buyer would eventually be able to pay an additional premium to buy back the PCS business.

Given Deutsche's declared interest in breaking into as many parts of the US telecoms market as possible, that would make Sprint an attractive acquisition candidate. The German carrier already owns 10 per cent of Sprint and a smaller share of PCS, the product of a failed three-way alliance that also included France Telecom and was unwound last year.

WorldCom's prospects seem far more uncertain. Shares in two other wireless carriers - Nextel, a company it came close to buying last year, and Voicestream - rose again yesterday on a belief that WorldCom would now make a different wireless acquisition.

Blocked in its efforts to get bigger in the consumer long-distance business, WorldCom may also opt to shed its operations in that market, said Mr Adam Quinton, telecoms analyst at Merrill Lynch.

That would cut it free from the most troubled corner of the US telecoms market, though it is difficult to see who would buy the operation.

On its own, with a depressed stock price, WorldCom could also become a takeover target.