Embattled audit firm Arthur Andersen on Tuesday acknowledged its inability to prevent its global network from unravelling as affiliates around the world sign deals with rival accounting firms.

The firm also said it would be unable to achieve a planned merger of its non-US operations with KPMG, another top US accounting firm.

"In view of the decisions by certain individual firms to pursue different directions, it is clear that a deal embracing all of the non-US firms is not achievable," Andersen Worldwide and KPMG said in a joint statement.

Andersen Worldwide is a relatively loose network of accounting offices employing 85,000 people that provides considerable latitude to regional and national offices, many of which have sought to cut their own deals as they scramble to decouple their practices from the US-based parent firm.

The move has been seen as an effort to salvage some value from Andersen's global operations as it struggles with criminal charges and massive liabilities to settle claims of accounting irregularities.

The firms' statement said "member firms of each organization outside the US are continuing transaction discussions to explore the potential for a combination of their respective operations."

In Madrid, Andersen Worldwide's Spanish affiliate, Andersen Espana, said it would soon integrate its operations with rival Deloitte Touche.

Many among Andersen Worldwide's key partnerships have since merged with other firms during the negotiations.