Hedge fund Atticus Capital (AC) is using its one per cent stake in Barclays to oppose the bank's ABN Amro takeover bid.
Barclays is seeking to acquire the Dutch bank ABN but is currently struggling to complete the takeover.
A Dutch court prevented ABN's proposed sale of its La Salle subsidiary to the Bank of America last month, freezing the forthcoming Barclays sale.
The British bank has offered €64 billion (£43 billion) and faces pressure from Royal Bank of Scotland (RBS) which is offering €71 billion (£48 billion) for the bank.
Analysts say Barclays will have to up its current offer if it is to secure ABN but the Financial Times (FT) reports activist firm AC will write to other shareholders telling the board to drop the bid.
The newspaper quotes AC's letter as describing ABN as "an inferior business in an auction at inflated prices".
Barclays has responded by reaffirming its intention to go ahead with the bid, saying AC's views do not reflect those held by the majority of its shareholders.
Shares in Barclays rose by 1.73 per cent on early morning trading.
Digg 
Delicious 
Reddit 
StumbleUpon 
Google 
Technorati 
Netvouz