The US authorities moved yesterday to block the $115bn merger of WorldCom and Sprint, spelling almost certain death for the telecommunications deal and sending the clearest signal yet that the era of the US mega-merger is reaching its limits.

Mr Joel Klein, head of the Department of Justice's antitrust division, said he had acted rather than leave 80 per cent of the US long-distance business in the hands of WorldCom and market leader AT&T. "This merger would reduce the big three to a big two - too few."