Potash is trying to stitch together a consortium led by China to back a management buyout to trump BHP Billiton's $38.6 billion hostile offer.

Potash has said ever since BHP launched its bid nearly a month ago that it was working to find a white knight, and worries in China about BHP getting control over the market for a key crop nutrient have spawned talk that China would try to block BHP.

Citing unnamed sources, the bid being considered would include a big element of capital from a Chinese resource company or investment fund, with smaller contributions from international sovereign wealth funds and possibly Canadian players such as pension funds. It also said rival potash producer Mosaic could be part of the consortium.

"It is a viable option," a source close to Potash said. The source added that it was tough to put together a structure for the consortium and that other options were still possible. "It is still a big cheque to write.... and it is a challenge to manage multiple parties," the source was quoted saying.

A Potash spokesman in Melbourne declined to comment on the report.

Sinochem, parent of China's largest fertilizer distributor, Sinofert, has expressed concern over BHP's bid for Potash. A respected Chinese business magazine Caijin quoted an official at Sinochem saying that a bid for Potash would not be a good deal for the firm but it may consider other assets of the world's biggest fertilizer maker.

The magazine later retracted the story and withdrew it from its web site, with no explanation.

The deadline for BHP's offer of $130 a share is Oct. 19, but it needs clearance from regulators before going ahead.