Mr Hermansen says he has no intention of resigning. Governments to meet Now Sweden's industry minister, Bjorn Rosengren, is holding emergency talks with Norwegian communications minister Dag Jostein Fjaervoll to try to resolve the situation. The dispute could threaten the minority government of Mr Bondevik, and the Norwegians are planning to get tough. They are expected to put demands to the Swedes that it cannot accept. The collapse of the merger would be a serious blow to both governments who have invested prestige and two years of effort in trying to fashion Europe's biggest cross-border telecoms merger.
Bankers believe the dispute has damaged the company's credibility and valuation.
It is not the first time the merger has been in trouble. Frictions over the role of the Swedish chairman and the Norwegian chief executive threatened to derail the agreement earlier, with the Swedish press making personal attacks on Mr Hermansen. The question of the size of the ownership share between the Norwegian and Swedish governments also caused tensions. The company, if it is floated, would be Scandinavia's largest. With mobile phone ownership rates among the highest in the world, it has an attractive business base which could prove highly profitable.