SPIRIT Pub Company has rejected a takeover approach from C&C Group, the Dublin-based owner of Tennent's Lager.

The Burton-based pub giant, which runs dozens of outlets in Scotland, told the stock exchange last night it had received a preliminary approach from C&C over a possible offer for the company. It said the board had reviewed the proposal and rejected it.

The development has left Greene King, owner of the Belhaven ale brands and pub estate in Scotland, in the driving seat to acquire the business.

This week the Spirit board told shareholders to accept a revised cash and shares proposal from Greene King, which valued the business at £723 million.

That came after Greene King had been rebuffed with an initial approach, valuing the business at £661 million, last month.

Under takeover rules, C&C has until 5pm on November 20 to announce its intention to make an offer for Spirit or withdraw.

The C&C approach for Spirit signals a radical new strategy for the drinks firm, which also owns the Magners cider brand.

While it has taken steps to strengthen its position in the Scottish pub market since acquiring Tennent's, in 2009 - it has taken a 25 per cent stake in Maclay Inns and lends to independent pubs - it has shown no appetite to become a pub owner until now.

A deal for Spirit would give it instant scale in the pub sector, with the Spirit estate spanning about 1,200 outlets around the UK. These include pubs in Scotland trading under brands such as John Barras, Flaming Grill and Chef & Brewer.