New York  - Banking rivals Citigroup and Wells Fargo have postponed for a day legal action over their tug-of-war for Wachovia, the United States' fourth-largest bank, it was disclosed Tuesday.

Citigroup on Monday filed a lawsuit against rival Wells Fargo & Co and Wachovia for 60 billion dollars in punitive and compensatory damages after a Wachovia announcement that it would go with a takeover offer of 15 billion dollars in a stock-for-stock exchange from Wells Fargo.

The Wells Fargo offer would override a Citigroup-government deal announced September 29, which offered 2.16 billion dollars for Wachovia.

That deal called for Citigroup to take on more than 40 billion dollars of Wachovia's losses, while the Federal Deposit Insurance Corporation (FDIC) would have absorbed losses beyond that amount in exchange for 12 billion dollars in preferred stocks and warrants.

The legal rest period, which is to last until Wednesday afternoon, was negotiated by the US Federal Reserve, according to US media.

The timeout is to allow for a compromise to reached.

In the event of a long takeover battle, the Fed feared massive problems for Wachovia already suffering from the fallout of the credit crunch. (dpa)