WASHINGTON, Oct 6, 2008 (AFP) - In the face of an escalating court battle over troubled bank Wachovia, suitors Wells Fargo and Citigroup agreed Monday to a 'standstill' until Wednesday on litigation actions.

A joint statement from the three banks came as the fate of Wachovia was in limbo following its deal to be acquired by Wells Fargo and a Citigroup lawsuit seeking 60 billion dollars from the two firms.

The three banks said they had reached a decision 'in consultation with the Federal Reserve,' to a 'standstill of all formal litigation activity effective immediately.'

They said they would 'cooperate in good faith ... with the goal of preserving the status quo during the litigation standstill period.'

This standstill agreement will terminate at noon on Wednesday, October 8, 2008, unless otherwise extended.

It was not immediately clear the reason for the agreement, but some reports said US regulators were trying to broker a deal to carve out portions of Wachovia for the other two banks to avert a protracted legal battle amid a deepening financial crisis.