Barclays has drawn up contingency plans for a big cash sweetener to strengthen its all-share offer for Dutch bank ABN AMRO, the Financial Times reported on Wednesday.

The newspaper reported that Barclays recognizes that, unless legal disputes run in its favor, it needs to improve its 65 billion euro ($86.74 billion) offer if it is to have a chance of beating a consortium led by the Royal Bank of Scotland.

Barclays is looking at reducing the number of shares it would issue for ABN and replacing them with cash, said the newspaper, quoting people familiar with the situation.

Barclays is not expected to make a decision about restructuring its offer until it becomes clear whether the RBS-led consortium can go ahead with its rival 71.4 billion euro break-up bid for ABN, said the FT.

That offer depends on the group, which includes Santander and Fortis resolving a dispute with Bank of America over the ownership of LaSalle, ABN's United States unit.

The prospect of Barclays sweetening its bid could upset big investors who are worried about a bidding war between Barclays and Royal Bank of Scotland.

But the newspaper said Barclays believes it could improve its offer without relaxing its strict criteria for acquisitions.

Royal Bank of Scotland Bank of america ABN Amro Barclays