Shares in ABN AMRO, the Netherlands' biggest bank, surged Monday after Britain's Barclays approached it with a merger plan for Europe's biggest financial services deal, sources said.

Barclays (Charts), Britain's third biggest bank, approached its Dutch counterpart with a merger blueprint that would create a global bank worth about $160 billion, as speculation of a takeover or break-up of ABN AMRO (Charts) intensified, sources familiar with the matter said.

Barclays, with a big presence in Europe and Africa, acknowledged press speculation about its interest in Amsterdam-based ABN AMRO and said it would clarify its position before stock markets open Tuesday.

A Barclays' approach is widely expected to spark rival offers from other international banks for ABN.

The British bank's holding statement indicated it has or has had some recent interest in ABN, which owns large retail banks in the United States, Brazil, Italy and the Netherlands.

Several other banks, including Dutch rival ING (Charts), Spain's BBVA (Charts) and France's BNP Paribas have also expressed interest - directly or through advisers - in either exploring a full merger with ABN AMRO or buying some of its large non-Dutch businesses, sources told Reuters on Sunday.

ABN it has come under pressure from investors, including British hedge fund TCI, to consider a sale or breakup to boost shareholder returns after several years of underperformance. TCI declined to comment on Monday.