Two German banks have abandoned plans for what would have been one of the biggest banking mergers in history.

Dresdner Bank says it called off the talks with Deutsche Bank.

A brief statement said Dresdner's management board "unanimously decided to discontinue the merger process" with its bigger rival "with immediate effect".

It said more information would be provided later on Wednesday. A Deutsche Bank spokesman said they were also preparing a statement.

Trading in their shares was suspended in Frankfurt, as well as those of the Allianz insurance giant, a major shareholder in both banks, which had helped bring the two together.

Although the reasons for the halt to talks were not immediately known, it is believed they centred on disagreements about the future of Dresdner's British investment banking division, Kleinwort Benson.

Recent reports have suggested that the vast majority of Kleinwort's 7,500 staff in London would have lost their jobs if the merger had gone ahead.