Responding to a query from the Australian Securities Exchange, BHP said: "BHP Billiton is not aware of a proposed acquisition by Chinese authorities of a substantial stake in BHP Billiton."

BHP's shares soared more than five percent Wednesday as rumours about China's interest swept the market following a report that a share raid was imminent.

The Australian newspaper, citing sources in Beijing, said Wednesday that China was working on a plan for a state-owned entity, possibly the Baosteel steel mill, to launch a share raid on BHP Billiton.

The move was aimed at intervening in BHP's proposed 147.4 billion US dollar takeover of rival Rio Tinto, the newspaper reported.

China has expressed concern the mega-merger would create a behemoth with too much power over commodity prices, and in February state-owned Chinalco joined with US firm Alcoa to buy 14 billion US dollars worth of Rio shares.

The Australian reported that China hoped to snap up more than nine percent of BHP.

BHP shares were little changed following the statement, down one cent at 41.90 dollars (38.97 US) about midday in a lower overall market.

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