MTS, the European government bond trading system, has said it will make the crucial decision on whether to allow hedge funds to trade directly on its market this month, a move that may anger its largest clients.

Gianluca Garbi, the chairman of the bond trading company, told Bloomberg yesterday: "Following the mandate received by the supervisory board, we are working on a plan. I'll call a meeting of the management board within the next two weeks proposing that the question of hedge fund access be put on the agenda."