Britain's BT Group could offer at least €6 billion to Spanish peer Telefonica on top of a 20% stake in its share capital for the O2 mobile network, Spain's El Confidencial reported today. 

Both Telefonica and BT confirmed yesterday that they were in early stage talks.

This came after El Confidencial reported O2 could be sold in return for a 20% stake in BT as part of a strategic alliance to strengthen the two groups.

 Including the €6 billion, the total value of the deal would be around €14 billion, less than Telefonica paid to buy O2 in 2006. 

Telefonica has produced an 18-page document detailing the conditions for the deal and potential cost savings ofintegrating O2 into BT, the online newspaper reported, citing unnamed sources. 

Telefonica has said that O2 remains core to its business but it has not ruled out asset sales to meet a target to reduce debt to less than €43 billion by the end of the year. 

A deal would bring O2 back to the BT group, having been spun off from the former British telecoms monopoly in 2001 and then bought by Telefonica in 2006.