Canada denies backing bid for Potash by BHP Billiton

The Canadian government was today bounced into an official denial that it had approved British miner BHP Billiton's $39 billion (£24 billion) bid for fertiliser maker Potash Corp.

BHP shares rose 2.2% higher this afternoon, with traders citing market talk over the bid.

Potash's home province of Saskatchewan has asked for the bid to be blocked but local reports said the government had decided to give the go-ahead after recommendations from Investment Canada, a body that is part of the industry ministry.

The government said it was still reviewing the case. It must decide whether the takeover would carry a net benefit to Canada. A decision is due on Thursday.

Industry minister Tony Clement said: "No recommendation has been provided by Investment Canada officials. I am currently reviewing the facts of the case. As of yet not decision has been made, and no decision or recommendation has been communicated to the investor."

Clement added that he would make the decision, not prime minister Stephen Harper as reported in the National Post newspaper.

BHP was not immediately available for comment.