LONDON (AFP) - London shares rose strongly Friday on prospects that beleaguered US investment bankLehman Brothers might soon be saved and a report that it was in rescue talks.

London's FTSE 100 index of leading shares was up 0.92 percent at 5,367.40 points in early afternoon trading.

The travel sector was also in focus Friday, as Britain's third-biggest tour operator faced bankruptcy as soaring fuel costs and the credit crunch left it clinging to survival.

The near-collapse of XL Leisure Group left more than 65,000 holidaymakers stranded abroad, adding to travel chaos in Britain, where thousands more were unable to take trains to France and Belgium after a fire closed the Channel Tunnel.

But the Lehman Brothers saga was still very much on traders' minds as well. "Much of the talk is still about Lehman Bros and the fact that the company is now expected to announce it has found a buyer in what is turning into something of fire sale," said CMC Markets dealer Matt Buckland.

The Wall Street Journal reported that Bank of America was among companies in talks to salvage Lehman Brothers, which badly needs a boost after massive mortgage-related losses.

There was also speculation that the US Federal Reserve central bank might broker a deal between the two banks, similar to action when it helped Bear Stearns sell itself to JPMorgan Chase earlier this year to prevent a collapse.

Oil prices bounced back on Friday from six-month low points as Hurricane Ike forced the closure of energy production facilities in the Gulf of Mexico, traders said.

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