Updated from 12:31 p.m. EST

Shares of

Qwest Communications

(Q)

fell sharply Monday after the company confirmed reports that it was in talks to be acquired by a "major telecommunications company."

But Qwest also said that it remained committed to its current merger with Baby Bell

U S West

(USW)

, countering recent talk that Qwest might be trying to back out of that merger.

Although Qwest did not identify its potential suitor in its statement late Sunday night, most speculation has focused on

Deutsche Telekom AG

, the German phone giant. Deutsche Telekom said early Monday that it would not comment on whether it is in talks with Qwest.

Qwest also said it would not enter into any agreements unless U S West also approved the deal.

But U S West does not seem comforted by Qwest's assurances that the merger is still on. The Denver-based Baby Bell threatened late last week to sue Qwest beyond the $800 million break-up fee if it backs out of its agreement.

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On Sunday, U S West's general counsel, Mark Roellig, said Qwest's negotiations were "conducted without our approval."

The uncertainty surrounding Qwest's ultimate intentions sent the company's share prices tumbling Monday. Qwest closed down 6 3/4, or 10.6%, at 57 1/4.

U S West was less affected. Its stock closed down 1/4, or 0.33%, at 74 7/8.

The decline in Qwest's stock price is likely a reversal of last week's strong gains, which followed reports of a potential

Deutsche Telekom

acquisition, said David Barden, telecommunications analyst at

J.P. Morgan

.

"Last week's run-up in Qwest is probably deflating because shareholders are reconsidering the probability of a Deutsche Telekom acquisition, given the fact that Qwest is already tied up in its own merger," said Barden, who rates Qwest a market outperform and has not underwritten stock or debt for the company.

U S West's confidence in Qwest's commitment to the merger have also been rattled recently by press statements by Qwest's chairman, Joseph P. Nacchio, who has raised concerns that the proposed merger might not pass regulatory muster.

Regulators might ultimately kill the deal because, as a regional Baby Bell company, U S West is currently not allowed to offer long-distance services in its 14-state home territory. Antitrust concerns would prohibit Qwest from offering long-distance service in those areas until those local phone markets become more competitive.

U S West and Qwest had originally announced their merger deal last July, when Qwest's $36.5 billion bid for the local carrier eventually broke off a deal that U S West had previously struck with Bermuda-based

Global Crossing

(GBLX)

.