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Icahn has been closely allied with Microsoft over the past few months, repeatedly urging Yahoo to do a deal with the software maker.

But Yahoo has steadfastly resisted, with CEO Jerry Yang and his board turning down several attempts to buy the company outright, and subsequently the company's web search business.

Yang's refusal to strike a deal infuriated Yahoo's billionaire investor, Carl Icahn, who proposed to overthrow the board with his own slate of directors, before being pacified with a seat on the board for him and two of his colleagues<

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Icahn's presence on the board - which was officially confirmed in regulatory filings yesterday - will likely encourage Microsoft to make fresh overtures.

In July, Microsoft said it would only be willing to deal with Yahoo if a new board were elected, prompting Icahn to declare: "You don't have to be Sherlock Holmes to realise there is no great comfort zone between the current Yahoo board and Microsoft. During this waiting period for regulatory approval, any acquirer - not just Microsoft - would want a steward they would feel comfortable with."

And in a terse statement issued when his position on the board was confirmed a couple of weeks ago, Icahn made it clear that he would have his say if Microsoft came knocking once more. "I am happy that the board has agreed in the settlement agreement that any meaningful transaction, including the strategy in dealing with that transaction, will be fully discussed with the entire board before any final decision is made," he said.

Microsoft has given no official indication of a renewed bid for Yahoo, but analysts are predicting a renewed bid may materialise within days, sparking a civil war amongst the new Yahoo board.