THE ruling board of the London Stock Exchange (LSE) gathered for a meeting yesterday at the start of another crucial week in the debate over its controversial share trading reforms.

A spokesman for the Exchange said the meeting of the LSE's 22 member board was a long scheduled event to discuss general issues of strategy.

But it comes just before another board meeting on Thursday to discuss the planned trading reforms, and tomorrow LSE chairman Mr John Kemp Welch will be grilled for the second time by a parliamentary committee looking into the Exchange's future.

Events this week could be important milestones in the development of the LSE, Europe's busiest stock market.

"This is pretty important stuff," said one market source. Thursday's board meeting will be followed by the release of a second consultation paper on the shape of the new trading regime, in which a computer network will automatically match buy and sell orders.

Some argue this would he cheaper and more efficient than the current system, in which market makers display prices on screen but agree deals on the phone.

The "white paper" is expected to say that market makers would continue to be able to trade large blocks of stock under the new regime - regarded as fundamental in protecting the liquidity of the London market.

The paper may also say the order matching system will be tested on stocks in the FTSE 100 of leading British shares before being applied to the rest of the market, sources said.

The introduction of the new system is unlikely to take place when originally intended this August. It is likely to be delayed to allow brokerages time to develop their systems to accommodate the new regime.

The LSE has to tread carefully on its reforms after the results of an initial consultation, released on March 6th, showed there was a strong seam of opposition to the plans.

A fifth of the 180 respondents said the LSE had not proved the need for the reform, or that the LSE had provided insufficient data on which to base a decision.