Yahoo! is under increasing pressure to seal some form of takeover deal after one of its largest single investors urged Microsoft to make a second, larger bid for the search engine.

ITpro.co.uk reports that that Bill Miller of US asset management firm Legg Mason, believes that Yahoo! is running out of options.

His comments were made in a letter to investors in Legg Mason funds - ITpro.co.uk says the firm holds around six per cent of the company's shares. Only Capital Research and Management has a larger holding (11 per cent).

At the same time as calling for Microsoft to submit a bid of around £20 ($40) per share for the search engine giant, Mr Miller said that Yahoo! was in a "tough spot if it wishes to remain independent".

He said: "It will be hard for [Yahoo!] to come up with alternatives that deliver more value than [Microsoft] will ultimately be willing to pay."

Yahoo! rejected Microsoft's last offer of around £15 per share on Monday.

A recent Connect survey found that the two major concerns about outsourcing services like IT support were 'loss of control' (56 per cent) and 'budget over-runs' (43 per cent).