One of BT’s biggest shareholders has said that it would support a multi-billion pound rights issue to fund the takeover of UK mobile operator EE or Telefonica’s O2, which would create the UK’s most powerful telecoms and media company.

The top five shareholder said that he would prefer for BT’s stock to be as liquid as possible and therefore would prefer a single-digit billion- pound rights issue. However, the investor said that he broadly supported BT’s move into mobile and so would also support giving Spanish telecom operator Telefonica a partial equity stake “if it was to help with price negotiations”.

The investor went on to say that he had recently spoken with BT’s management and it was clear that “all options were on the table”.

Credit rating agency Moody’s said that if BT was to make a full-cash offer it would likely face a credit rating downgrade, which it added would “contradict the operators’ aim to become a Ba1 business”. The company’s current Baa2 rating is based on BT’s adjusted debt to earnings being at 3.2 times and is dependent on not going beyond an upper limit of 3.5 times.

Financing bankers said conversations were already under way about BT’s funding options. They added that the UK telecoms group would have no problems securing support for a multi-billion fundraising and pointed to the recent rights issues of French cable operator Numericable for €4.7bn to finance its takeover of SFR and Telefonica Deutschland’s €3.2bn share issue to fund its E-Plus deal as examples.

Telefonica could reportedly receive a 20pc stake in BT in exchange for O2, which would limit the amount of cash the UK operator would need to raise. However, some industry sources have questioned the stock deal as the Spanish operator is keen for extra capital to tackle its bloated debt pile and fund deals in its key Latin-American markets.