AMSTERDAM, Netherlands (AP) ABN Amro Holding NV has decided to drop its endorsement of an agreement to be acquired by Barclays PLC following a higher bid from a consortium of banks led by Royal Bank of Scotland PLC, newspapers reported yesterday.

The RBS bid, mostly in cash, is worth 70.5 billion euros ($96.6 billion) at current levels, while the Barclays offer, mostly in shares, is worth 63.9 billion euros ($87.5 billion).

Either takeover, if it succeeds, would be the largest in the history of the financial industry.

The Sunday Telegraph reported, without naming sources, that "meetings of ABN's two boards this weekend have concluded that the bank can no longer recommend the Barclays deal now that a higher offer from the Royal Bank of Scotland-led consortium is on the table".

The Wall Street Journal, citing unnamed people familiar with the matter, said ABN "has decided to take a neutral stance on competing bids".

However, "the situation was still in flux on Sunday and the decision could change, though that appears unlikely," the Journal said.

ABN officials could not immediately be reached for comment Sunday.

It had been widely expected that the bank would present both deals to shareholders without a recommendation. Each has its risks and its advantages, and if Barclays' share price were to increase significantly in the coming weeks, its offer could conceivably rise above that of the RBS consortium in value, though that is not likely.

Barclays has claimed its offer is better despite being worth less because it will lead to more long-term growth than the RBS-led bid. RBS disputes that.

Barclays made an all-share offer for ABN in March that was backed by the Dutch bank's boards and has never been formally renounced, though much has changed in the meantime.

After RBS signalled in April that it intended to make a higher offer for ABN, the Dutch bank's chief executive Rijkman Groenink agreed to sell ABN's US arm, LaSalle Bank Corp., to Bank of America Corp. for $21 billion.

The surprise move was widely seen as a poison pill measure to frustrate RBS, which also wanted LaSalle, and it led to a shareholder rebellion and a spate of lawsuits by competing banks and shareholder groups that froze the takeover fight for two months.

Ultimately, the Dutch Supreme Court ruled the sale was binding, and the RBS consortium pushed ahead with its rival deal anyway on July 18. Groenink has been sidelined from negotiations.

On July 23, Barclays increased its offer to narrow the gap with RBS, on the condition that ABN continues to endorse their merger.

ABN responded then that it "welcomes the opportunity for shareholders to consider two competing proposals on a level playing field." But it did not say whether that would mean dropping its endorsement of its agreement with Barclays.

Barclays is likely to push ahead with its offer even if it fails to gain the support of ABN's board.

The company is due to report second-quarter results today, but they are sure to be eclipsed by questions surrounding the takeover.