Denver-based Qwest issued a statement Sunday night confirming the discussions without naming the company, which is reportedly Germany-based Deutsche Telekom AG.

U S West, the Denver-based Baby Bell, threatened last week to sue Qwest if it backs out of its agreement.

"We have recently been informed that Qwest has had conversations with a major telecommunications company," U S West General Counsel Mark Roellig said in a statement. "As we indicated last week, these conversations were conducted without our approval and we do not have any knowledge of the status or substance of the conversations."

Deutsche Telekom would not comment Monday on the developments between Qwest and U S West, nor on whether it was in talks with Qwest.

But over the weekend, chief executive Ron Sommer said in an interview with Germany's Die Welt newspaper that his company is planning a takeover soon and isn't ruling out a big acquisition. He also reiterated that the U.S. market is very important for Deutsche Telekom.

Qwest's statement Sunday said Denver billionaire Philip Anschutz, Qwest's principal shareholder, would support transactions with the major telecommunications company.

Qwest Chairman Joseph Nacchio has been quoted in recent newspaper stories saying the deal with U S West might not be completed. He has also expressed concern about U S West's conflicts with regulators in some of its 14-state territory, including Colorado where it was ordered to refund $12.77 million to phone customers for service-quality violations.

U S West has said it will fight the order.

Nacchio, though, said Sunday that the merger agreement with U S West is still in place and Qwest will not enter into any transaction with the other company "unless U S West reaches an agreement with that company for the acquisition of U S West on terms acceptable to it."

U S West remains committed to completing the merger with Qwest, Roellig said.

When U S West and Qwest first announced their deal in July, they promised to create a powerful communications company with customers in 14 states, and an aggressive Internet strategy.

Indeed, Nacchio wanted to acquire U S West so badly that he launched a hostile bidding war to break up a merger agreement between U S West and Global Crossing Ltd., a Bermuda-based company building an undersea fiber-optic cable network.

In a memo to employees Friday, U S West chairman, Solomon Trujillo, "pledged to fight for the interests of employees and shareholders."

Trujillo said last week that he would resign from the company after the merger with Qwest closed.